Has the ED housing market reached the bottom yet ( II )

[macroban]

> ?100 per week for a 3 bed hse with front and back gardens and a garage

Sounds about right after the current downward correction in private rents bottoms out.

I'm not sure how many of East Dulwich's borrow-to-let landlords could continue to subsidise their tenants with a rental of ?435 pcm for a three bedroom house.

Valuing such a house on rental yield gives a valuation of c?65k. Pre-1939 value in real terms.

[ChavWivaLawDegree]

My heart bleeds for them Macroban!

[Huguenot]

The point is CWALD that you're subsidised by the tax paying population. The system wouldn't work if everyone demanded your benefits. It's a wee bit rude to take with one hand and then flick the 'V's with the other! ::o

[macroban]

> The point is CWALD that you're subsidised by the tax paying population.

An interesting assertion.

Now the calculation to support it?

[ChavWivaLawDegree]

I submit that i am subsidised by noone and that just because my rent has increased by less than private rents, this does not prove you are right. The private sector became the hostage of speculators who hated the competition council housing gave their investments so their friends in govt did their best to destroy said competition.

It is the private sector who are in fact the recipients of subsidies in the form of massive bail outs by the rest of us. So there.

[????]

mmmmmm....you been reading the Morning Star again Chav?

[microbite]

I am in the lucky position of having bought my home for peanuts, (less than ?50,000) and have nearly paid off my mortgage, (well all but a few thousand pounds), I would hate to have lived my whole life paying all that rent month after month with nothing to show for it at the end of it all and the main reason for my buying was simply that fact, I just did not want to hand my money month after month over to the council with feck all to show for it at the end, as it is my mortgage is peanuts and a lot less than many are paying for rent, but my home is an asset and will be passed on to my kids to do with as they will, (at the mo it is worth around ?250k with the inflated prices im sure that will come down but still have a lot of equity in it) ultimately if you are renting the property it is not yours and all your money is just burning away and lining the council's pockets.

So there are some pluses to owning!

[ChavWivaLawDegree]

Of course, Microbite, but having a massive mortgage is not owning and puts you in a more precarious position than someone who has a secure council tenancy.

[Huguenot]

Macroban and Chav...

Annual figures for public support of housing 2004-5

Economic subsidy to social tenants 6.6bn

Housing benefit 8.8bn

Right to buy discounts 1.8bn

Home Improvement grants 0.3bn

Tax breaks 15.7 bn

Low-cost home ownership 0.3bn

Housing benefit 3.2bn

Income support for mortgage property 0.3bn

(Source London School of Economics)

I make that 39.7 billion pounds coming from tax payers (that's where the government gets its cash) that is tied to housing? Of that approximately half goes to people in social housing and half to those in private rentals.

Additional payments of around 28bn are also predominantly received by those receiving housing support, these include Income Support, Job Seekers Allowance and Guaranteed Credit Facilities.

More than half of the residents of social housing of working age have no paid employment at all. Tell me these people aren't living off the rest of the country whilst cocking a snook?

You'd understand why people would advise them not to bite the hand that feeds them?

[Jeremy]

I (more or less) agree that council tenants are being subsidised by the taxpayer... but if someone is deemed eligible for council housing, then I wouldn't blame them for taking it. It's human nature.

[Huguenot]

Agreed, and most times the investment is worthwhile.

I just find it a little rude when they metaphorically stick two fingers up afterwards - the kind of "I'm so clever I've got your money and it's given me a bigger house than you" approach.

[Keef]

I am with Jeremy. What does bug me quite a bit though is the whole secured tenancy that can be passed to offspring. I have a friends who have grown up in council housing, and they just totally expect it for themselves, and are getting it. Just doesn't seem fair to the rest of us.

Basically, they could grow up, get a really well paid job, and just automatically get a council house, and that just doesn't seem fair. I have sat in the pub with the friends of mine who have grown up in council housing, and listened to them boasting about how they are going to get a new flat, or how they're using some story to blag one, and I sit there nodding and grinning because I don't want to fall out, but what I actually want to say is f**k you, what makes you any different or more deserving than me or anyone else?

And CWALD I have to agree with Huguenot that your post did come across a bit like "ha ha, I have all this, you don't", not sure that's how you meant it, but that is how it sounds.

Edited to clarify my point a bit.

[ChavWivaLawDegree]

Some interesting stuff I nicked from the Defend Council Housing site:

"Opponents of public housing like to allege that council housing, unlike other forms of tenure, is subsidised.

The reality is that government has been disinvesting from council housing (?Robbery? from tenants rents and siphoning off capital receipts), whilst subsidising RSLs through grants, and homeowners and buy-to let landlords through tax breaks.

Government?s multi-billion pound bailout of the banks is the biggest ever public subsidy for private housing.

The robbery and disinvestment from council housing continues ? the problem is not that some councils subsidise others but that the Treasury has been making a profit out of council housing by siphoning out ?1.8 billion a year (2008/9) in rental income and billions of pounds from the proceeds from ?right to buy? and other capital receipts.

Council housing was conceived as first class housing designed and built to the highest standards to provide a mainstream alternative to the private market. Alongside the NHS, schools, pensions and other benefits it helped provide universal provision of quality essential public services available to all. Means-testing rents, time-limited tenancies or changes to Housing Benefit rules that involve differential payments all stigmatise council housing, undermine mixed communities where a people from a wide range of circumstances live side by side and lead to those in greatest poverty being pushed into the worst housing.

Of course if people want to buy they should have that choice. But public money and public land should be prioritised for building first class public housing.

Increasing supply would allow local authorities to open up allocation policies once again to people from all backgrounds and circumstances. Reestablishing council housing as a mainstream tenure of choice and offering tenancies to the wide social mix amongst the 1.7 million households on council waiting lists would return council estates to the mixed communities they used to be.

The reality is that the private market is not going to deliver the secure, well built and designed and environmentally friendly homes needed at a price that working people can afford. Nor can the private sector ever be made accountable. Large numbers of un-sellable rabbit hutches built for a ?buy to let? market that was promoted as a guaranteed investment is a direct consequence of that lack of accountability; so too are the increasing numbers of private tenants and marginal home owners facing repossession.

The economic crisis was partly triggered by government?s obsession with privatisation and deregulation, including disinvesting from and stigmatising council housing to push people into reliance on private housing solutions."

Couldn't have put it better if I'd tried!

[ChavWivaLawDegree]

And Huggie - I'd like to see a link to your LSE quote above - especially as they seem to have counted HB twice.

Also HB is paid in huge amounts to private landlords who are allowed to charge ?350 per room for crappy accomodation if they provide breakfast and call it a hostel. They are the ones stealing all our taxes. Council rent is tiny in comparson and makes working and paying rent easy for tenants - unlike the poor sods trapped in privately owned hostels.

[Keef]

Of course if people want to buy they should have that choice.

Didn't Thatcher say that CWALD? ;-)

But public money and public land should be prioritised for building first class public housing.

Of which there will never be enough to go around.

Totally agree about the buy-to-let stuff, but I think a lot of that stuff is just sensationalist bo!!ocks.

Government?s multi-billion pound bailout of the banks is the biggest ever public subsidy for private housing.

No doubt this will help a lot of the big landlords and rich people, but it will also save a lot of the little people, and I have heard no better ideas.

[Huguenot]

It's not a link Chav, it's a study, and it's attached in all its glory.... ;-)

[????]

Well you could of chav - the article you C&P shows some empathy with those suffering in the private sector including buy to let....rather than your very unempathetic "My heart bleeds for them"........personally I feel sorry for those living in substandard public sector housing and those being repossessed just for trying to live their dream....

[ChavWivaLawDegree]

Yes but Keef - the government stole the money from the sale of the council stock. If the council had been allowed to use it to build more housing we wouldn't have been in the shit we are now, but then again, all the greedy housing speculators wouldn't have been able to make the killing they did, would they?

Most of the home owners who joined the feeding frenzy but who have or are about to get stung, deserve our sympathy - but not a lot.

I'm just glad I wasn't one of them.

Sorry to steal their smugness.

Karma and all that.

[Keef]

Also HB is paid in huge amounts to private landlords who are allowed to charge ?350 per room for crappy accomodation if they provide breakfast and call it a hostel. They are the ones stealing all our taxes. Council rent is tiny in comparson and makes working and paying rent easy for tenants - unlike the poor sods trapped in privately owned hostels.

This is quite correct, but I still think you are somewhat missing the point. Of course there are a load of greedy rich landlords out there taking the absolute p!ss, I don't think anyone would argue with that, especially not Huguenot.

The point is however that most "average joes" can't get a council house, have to pay stupid rents, and do subsidise council housing whether you like it or not. They may well subsidise other things, but to deny they subsidise council housing is just not correct.

"Opponents of public housing like to allege that council housing, unlike other forms of tenure, is subsidised.

The reality is that government has been disinvesting from council housing

Even if this is true (and they offer no evidence), the amounts invested are still large!

To clarify, I am NOT an opponent of council housing, I just wish it was more fair, and I don't think anyone should have a right to it based simply on the fact that their parents had it.

[Huguenot]

Besides, I think the quotes you've take from the 'Defend' bunch are both disingenuous and unrealistic.

The countries where government controlled housing dominated have created squalid communities, curtailment of basic freedoms, and economic & emotional failure. Check out the USSR and China. An essential part of freedom is the opportunity to reap the rewards of your physical and intellectual investment, property rights retain an influential role in this process.

Frankly, if all I got was a council house regardless of my efforts, then I'd be part of the crowd of f*ckwits who did nothing with their working lives... then there'd be no government tax revenues/handouts and they'd all be in the sh*t too.

Or would you then be suggesting chain gangs and Schutzstaffel to make us work ;-) Arbeit mach frei...

[ChavWivaLawDegree]

Some more reading for you - a bit long I know - but it has some of the sources you requested:

Defend Council Housing

Evidence to DCLG Select Committee Enquiry on Rented Housing

October 2006

This evidence addresses the following terms of reference of the enquiry:

? The future role for local authorities as builders and managers of social housing

? the effectiveness of different social housing models including traditional local authority housing, ALMOs, housing co-operatives and housing associations

? The relative funding priority being given to social rented housing as opposed to shared ownership and other forms of below market housing

1. Introduction

Britain needs council housing. The current government policies of selling off the housing we already own and directing public subsidy for new housing provision away from councils and towards housing associations, private developers, subsidised ownership and intermediate housing have contributed to a massive housing crisis. There is a broad and growing alliance of tenants, trade unions, councillors and MPs across all parties calling for councils to be able to improve their existing homes and build more.

Current government policy has been challenged by evidence from the ODPM Select Committee (?Decent Homes? enquiry), the House of Commons Council Housing group; the Audit Commission?s call for a ?review of housing finance?; 123 local authorities across the UK opting for stock retention; three consecutive votes supporting ?the fourth option as a matter of urgency? at the Labour Party conference; the DCH Lobby of Parliament (Feb 2006); 149 MPs signing the current Early Day Motion for investment in council housing; and a growing proportion of tenants voting NO to transfer including Sedgefield, Stirling, Tower Hamlets, Selby, Mid-Devon, Cannock Chase and Waveney.

The ODPM Select Committee in 2004 described government policy on council housing as ?dogmatic? and supported the proposals for an ?investment allowance?. The Public Accounts Committee, based on evidence from the National Audit Office, said that improving homes through stock transfer was more expensive.

Whilst we welcome more investment in communities and the promise of new council homes neither is an alternative to improving existing homes and estates and providing ?all? homes with ?modern facilities?. Council tenants need both.

It is important to recognise that the broad-based campaign to win a ?level playing field? for council housing and a ?Fourth Option? of direct investment has never been just about meeting the government?s 2010 target. The central argument has been that decent, affordable, secure and accountable council housing has served generations well and continues to offer an essential alternative to the private market for three million existing council tenants, our children and millions more who need a home, today and tomorrow.

Achieving the decent homes standard is just part of what tenants have been campaigning for. Equally, if not more important, is securing the future of council housing as first class housing available to all who need it.

2. Secure and affordable homes - the future role for local authorities as builders and managers of social housing

Last month Defend Council Housing published a collection of essays by leading tenant activists, trade union leaders, MPs, academics and councillors on ?The Case for Council Housing in 21st Century Britain.? Together these show not only why council housing is a vital public service but the massive breadth of support it commands across the country.

In his article ?Housing plays a critical role?, Dave Prentis, general secretary of UNISON, explains why ?the consequences of the lack of social housing are far reaching and very distressing?. Peter Ambrose, Professor of Housing Studies at the University of Brighton, argues that ?an adequate supply of decent affordable homes, for rent and not to buy? is a crucial element in the country?s infrastructure? (?What is the Housing Problem??). He concludes:

?we must rapidly increase the stock of decent rented housing at affordable rents. In our particular housing history the most cost-effective way to do this has been with a sizeable stock of local authority rented housing using the pooled historic cost principle for rent-setting. This system, for many years a success story, became subverted by a combination of factors - commercial producers with an untested high-rise technology to sell, Treasury tight-fistedness on maintenance budgets, ideologically driven ?right to buy? campaigns, ham-fisted and paternalistic management practices and ghettoisation because the stock was build in large mono-tenure spreads. So the baby was thrown out with the bathwater. The obvious step is to retrieve the baby. We need an end to transfers and ill-concealed privatisation, we need massively increased direct investment in local authority housing ? the ?fourth option? - we need better maintenance and management regimes for this stock and better standards for its construction. Time is running out. The vast majority of us live in the 97% of towns where nurses cannot afford to house themselves.?

The campaign for direct investment in council housing addresses the needs of 3 million existing council tenants and their families across the UK and the 1.5 million on housing waiting lists (a figure which we understand is artificially low as so many are discouraged from registering).

It also offers hope ? and a secure job with decent conditions ? to council workers who want to provide a public service and to local councillors who believe that the provision of public services by an elected public authority is worth defending.

Precisely because the private market always fails to meet social need there is a massive demand for council housing today. We believe that if the extra investment was provided to improve council estates and to build new council homes to address the demand, then council tenants and their estates would be proud once again. As Jon Cruddas, MP for Dagenham and Rainham, argues, investment would overcome the desperation that fuels racism:

?The most acute politicisation of resources concerns that of housing. Yet it is considered through the prism of race rather than the reality of the systematic failure to provide low council housing so as to replenish that sold off? The policy response should be self evident. We have the most brownfield land of any other London Borough. We have a working class community literally built on the principle of council housing; we have the fastest growing and fastest changing Borough in the Capital. Our historic role as a debt free authority means more rental income goes to the centre than returns to the Borough. We have an authority and a community desperate to build more council units for local people. We are the frontline in terms of the fight against fascism. All of these issues are inter-linked. All roads lead back to more council housing units.? (?Housing Policy Failures and the Rise of Extremism?, in The Case for Council Housing in 21st Century Britain)

For too long this country has been promoting home ownership. The case has never been properly made ? or proven. Ben Jackson, Shelter?s Director of Campaigns, said: ?Our research looked at the bigger picture and found that people?s first priority for themselves and their children is not home ownership ? but having a safe, decent home they can afford.? 72% of respondents put affordability and safe neighbourhood before ownership.

Dexter Whitfield of the European Services Strategy Unit points out the dangers of over-promoting home ownership:

?All public housing, not just council housing, is now being condemned as ?unfit?. Having rebranded council and housing association housing as a single tenure ?social housing?, the next move is to claim that the system ?isn?t working? because it has a stigma with negative impact and breeds welfare dependency. The recent Smith Institute report on ?rethinking social housing? claims it must be terminated as part of the ?proactive de-concentration of deprivation? to revitalise neighbourhoods? New Labour has created the political space in which so-called ?think tanks? and consultants can develop and promote neoliberal ideas more freely. It is not only public ownership and provision which is trashed but the concept of social justice is being transformed into a narrow personalised asset-owning model? These ideas are not new, nor do they describe a new type of modernisation. They are rooted in neoliberalism, a conservative economic philosophy? Council housing is a tenure which provides affordable housing to meet social needs. It meets people?s need and desire to rent rather than own a home. The vast majority of existing tenants want to remain council tenants?The cost of council housing is collectivised, shared between all tenants in the same way as the NHS and education. This is a basic economic and political principle which makes economic sense and is a foundation of the modern welfare state. Direct democratic accountability to local government is far superior in the long term to management controlled arms length companies and quangos.? (from ?Ideology subverts social housing?, in The Case for Council Housing in 21st Century Britain)

It is a complete fallacy to claim, as the Smith Institute paper does, that security of tenure causes dependency. Historically there was a variety of income spread throughout the council housing sector.

But due to the loss of stock over the years, increasingly only those with high assessed social need are likely to be successful in being granted a tenancy. Thus it is not the tenure that is the issue but scarcity and high demand. Only those most vulnerable or in greatest need can access council housing - unsurprisingly most are heavily if not fully dependant on benefits.

Without the widespread loss of council housing over many years there would have been more available to teachers, nurses and public sector workers, and indeed anyone on modest incomes who is now priced out of the market. The sector would not then be so heavily populated by benefit dependent residents.

If we had more council housing, not only would it dilute the benefit dependency issue, it would also help to create more genuinely sustainable communities. Removing security of tenure can only penalise the most vulnerable by increasing their vulnerability. As Peter Malpass puts it:

?The more successfully social housing works as a springboard for those who can afford to jump off it, the more residual will be the service that is left behind? What we need is a different vision for social housing, in which it is neither a springboard nor a safety net? Only policies designed to engender a genuinely positive image will attract people who want to stay indefinitely, not just until they can qualify for the stealth subsidy that will allow them to escape into ownership. The continued relentless promotion of the benefits of home ownership can have only negative implications for social housing. The right to buy was a disaster for social housing and cunning new plans to pump up the already bloated owner occupier sector will only make matters worse.?(Inside Housing 29 September 2006)

Britain needs new housing owned by local authorities with tenants having a ?secure? tenancy, lower rents and an accountable landlord. We have no problem with a value for money test for schemes of new housing. Council housing is cheaper to build, manage and maintain than the alternatives because councils get preferential rates of interest and have lower management costs.

123 councils across the UK have opted for retention ? despite the government pressure. Others are likely to follow as more tenants vote No. We?ve made the financial case and clearly identified that decent, affordable, secure and accountable council housing is financially viable.

Tenants are not prepared to trade our secure tenancies, lower rents and democratic landlord for new kitchens and bathrooms and neither will they allow politicians to use the promise of building new homes as an excuse to walk away from their obligation to existing council tenants and estates.

As Austin Mitchell reminds Ministers in his introduction to The Case for Council Housing, the government was elected on a clear manifesto commitment "By 2010 we will ensure that all social tenants benefit from a decent, warm home with modern facilities." We expect them to keep it in spirit and in word.

3. Different ?Social Housing? models - i) ALMOs and Local Authorities

The case for the ?Fourth Option? rests in part on the principle that if all the money that broadly belongs to council housing is ring-fenced and reinvested then improvements to homes and estates to bring all homes up to modern standards can be funded and a level playing field created to maintain standards and provide council housing with a long-term secure future.

DCH and its supporters have long argued that if government has extra money for authorities who set up ALMOs, why can?t they give this money direct to the local authority if that is what tenants want? In addition, if a council?s housing department has been audited and found to be good or excellent, why waste public money setting up a private company to replace it?

Many tenants, and elected councillors, in areas that have set up ALMOs did so reluctantly and with great suspicion. Proposals to transfer majority ownership of the companies into the private sector confirmed fears that ALMOs are a twostage privatisation strategy. Once the decent homes work has been completed most tenants will want the management of their homes to revert back to the council to avoid any future risk of privatisation taking place. Clearly any ?best practice? can also be retained.

The Audit Commission in their ?Financing Council Housing? report, July 2005 proposed assisting those authorities with high levels of debt arising from borrowing to build large numbers of council homes. It would make sense for government to take over the debt direct freeing local authorities to use new Prudential Borrowing opportunities.

The discussions between John Prescott and ?interested parties? prior to the 2004 Labour Party conference went some way to finding a formula. This involved allowing all ?good? performing councils direct access to the additional money currently available to authorities that set up arms length companies. The House of Commons Council Housing group, and more recently, the Labour Housing Group have built on these proposals. The new willingness by Ministers to look at reforming housing finance clearly opens up opportunities. What is required is ring-fencing of the resources that belong to council housing and a transparent, fair mechanism driven by the need to improve and sustain council homes across the UK.

Different ?Social Housing? models ? ii) ?Community Ownership?

We are cynical about the government?s attempt to put fresh energy into promoting more ?community ownership of homes? (From Decent Homes to Sustainable Communities, June 2006). There is no evidence that any of the options proposed in that paper lead to ?much greater tenants involvement in decision making?. Tenants and their supporters will not be distracted from the two overarching issues of decent homes, and building council houses with secure tenancies.

?Proper accountability to local tenants and residents? is a fine principle to uphold. But we should aspire to better than boasting that ?Tenants have participated in options appraisals and are board members of ALMOs and housing associations?. RSLs are increasingly remote and unaccountable multi million pound national businesses generating huge surpluses. The lack of power and significance of board members has been exposed by both the Audit Commission?s report and research by Liz Cairncross for the Housing Corporation.

Perhaps the following observation helps explain why tenants do not value the tokenism of tenant directors: ?Many tenants of such housing associations feel that they are on the board to ?represent? a constituency of tenants ? This is not compatible with the accepted principle that dictates that as a board member they have to work for the interest of the organisation that is, that the directors responsibility takes supremacy?? ?Often this misapprehension is a direct result of mis-selling the role at the time of the ballot.? (Improving Services Through Resident Involvement, June 2004).

In our experience terms such as community ownership or increased tenant involvement are usually an alibi for a drive towards privatisation. Council tenants, in common with the rest of the public already own our council housing. Our researches have shown that so-called community ownership options such as ?Community Gateway? or ?Community Mutual? type registered social landlords are just privatisation with a fancy wrapper.

The key thing about any RSL is the fact that they borrow money from the banks ? no amount of rhetoric about community involvement is going to take away the control that lenders have and the way that affects the culture of an RSL.

The government claims that making tenants ?shareholders? will empower tenants but there?s no basis for this. Tenant ?shareholders? in a Community Mutual or Gateway organisation won?t even have the right to elect the whole board. Tenants on the board will be in a minority and their hands will be tied by company law.

A report for the Welsh Assembly on Community Mutuals has shown that transfer RSLs and genuine co-operatives have almost nothing in common (Housing, Mutuality and Community Renewal: a review of the evidence and its relationship to stock transfer in Wales, Sept 2004). It is not acceptable that the government is trying to hijack the ideas of the co-operative movement to support privatisation. True community ownership is publicly owned, democratically accountable council housing, where individual tenants and tenants associations have a direct democratic relationship with their local political representatives.

Different ?Social Housing? models ? iii) ?Mixed tenure?

Mixed tenure is another fashionable concept of which tenants are understandably cynical. No one would object in principle to the idea of supporting mixed and sustainable communities, but all too often this means pushing council tenants out of inner cities to make way for luxury developments. Perhaps the idea of mixed tenure would be more warmly welcomed if there were proposals to commandeer land in areas of luxury private housing to provide new council homes.

As Dot Gibson, secretary of the National Pensioners Convention, Greater London Region, points out, communities are ?sustainable? with adequate support and resources. ?There was a community. For 45 years [my Dad?s] neighbours were his friends and he had seen their children grow up. There was a housing office and advice centre, a community hall and then Council employed wardens on hand in his old age. This is the kind of housing that is needed to cater for all generations and to ensure the development of communities where children and old people feel safe. That?s why the NPC Greater London Region supports the Defend Council Housing campaign. For today we see the erosion of planned publicly owned housing.? (?There was a community!? in The Case for Council Housing in 21st Century Britain)

For council tenants, watching new posh neighbours drive in to their gated home across the road or young professionals buying up ex council homes as the first step on the home ownership ladder, doesn?t lead to wealth rubbing off ? it increases resentment and fragments communities at the expense of those with least money.

We do not believe that privatisation, home ownership and asset stripping our estates to provide luxury homes will improve the conditions of the great majority.

Different ?Social Housing? models ? iv) Value for money considerations

Ministers are wasting public money. With access to lower interest rates and by using in-house expertise councils can build, manage and maintain homes cheaper than the private alternatives.

Investment via stock transfer may take most of the expenditure ?off balance sheet? but it is more expensive (?1,300 more per home than if the council did the work according to the Public Accounts Committee) and there is a large hidden cost to the public ? which is ?on balance sheet?. The public loses the asset (and the continuing value from it after 30 years which is not included in the transfer price calculation); Treasury pays more in Housing Benefit costs as tenants? rents increase, and there are increasingly hefty early redemption payments on loans before the sell-off can take place.

This is on top of the army of consultants paid out of the public purse to advise and ?facilitate? transfer.

Good and excellent performing councils have unnecessarily spent tenants? money on setting up a new private company (often acquiring new offices, expensive re-branding and increasing senior managers? pay) just to meet the government ?arms length? criteria to access the additional money on offer to ALMOs.

Millions more have been poured into endless headline grabbing shared homeownership schemes ? priced beyond the means of most in housing need. The latest example is ?key worker? homes built with public subsidy being sold on the private market because they were unaffordable to key workers.

Public subsidy that once went into council housing and was then diverted to Registered Social Landlords is now on offer to private developers to add to their profits. There has been no public debate on this policy shift.

By finally dropping a dogmatic insistence on promoting private alternatives to council housing Ministers can meet the aspirations of millions for first class council housing and save money at the same time.

4. Relative Funding Priorities

Putting public money into ?bricks and mortar? rather than subsidising a growing army of private landlords makes ideological and economic sense.

There are plenty of places the government could find money to improve council housing, meet its manifesto commitment and allow councils to build again:

? Housing associations are sitting on accumulated ?non-earmarked surpluses? worth more than the entire ?3.9 billion national affordable housing programme for 2006/08 (Inside Housing, 11 August 2006). Much of this was paid for through public subsidy. It should be reinvested through interest free bonds or loans. Democratically elected councils with a strong local mandate can then get on with improving existing and building new council homes their constituents are demanding.

? Income received from stock transfers, though scandalously undervaluing council housing and land to give it away for next to nothing, has nonetheless produced ?5.86 billion ?Total Transfer Price? which should be reinvested (UK Housing Review 2005/2006).

? ?: the abolition of mortgage interest tax relief (MITR)? has boosted tax receipts by ?30 billion, plus a further ?3 billion each year; receipts from the Right-to-Buy sales of council housing that have yielded around ?45 billion ? only a quarter has been recycled into improving public housing; ? Stamp Duty on property sales? last year brought in ?6.5 billion? (Joseph Rowntree Foundation 01/12/05).

? ?13 billion was taken out of council housing between 1990 and 2003 through the ?Daylight Robbery Tax?. That?s almost 2/3rds of what was then needed to bring all council homes up to the Decent Homes standard.

? Council rents are set to rise via ?rent convergence? but Ministers say ?There are no plans to ring-fence rental income within the national housing revenue account?(Housing Minister, Yvette Cooper, PQ answer 25/01/06)

? Government is offering subsidies to private developers to build so-called ?affordable housing?. The Mayor of London suggests a mortgage based on an income of ?47,000 per annum meets the criteria!

? The housing benefit bill is unnecessarily driven up by transferring homes into the RSL sector and by needlessly raising council rents to the same level to make transfer more attractive: ?public spending on bricks and mortar subsidy for council housing [fell] from ?5.6 billion in 1980/81 to just ?0.2 billion in 2002/03... Over the same period of time total expenditure on housing benefit rose from ?2.7 billion in 1980/81 to ?8.6 billion in 2002/03? (UK Review 2005/2006).

? ?3.6 billion is on offer to pay for housing PFI schemes

? Instead of diverting public funds to subsidise the private sector and home ownership government should give democratically elected councils the powers to use available land to build first class public housing. As with empty homes, it would stop lenders, property companies and RSLs building up massive land banks.

? Planning (section 106) agreements should ensure at least 50% council housing as part of any new housing development ? 100% on any site using publicly-owned land. Why not put a ?windfall? tax on super profits from land speculation and luxury house sales, and use taxation to discourage speculative land and housing hoarding.

? Housing Corporation chief executive Jon Rouse says ?It is a provoking thought that the conversion of just ?1.5 billion of the ?13 billion housing benefit bill into capital subsidy would enable us to meet Kate Barker's estimates of annual social housing requirements.? (Rethinking Social Housing, Smith Institute, July 2006).

All these alternative sources of funding public housing would provide the homes and communities we need.

5. Conclusion

Three million existing council tenants ? and the 1.5 million households on council waiting lists ? have a material interest in securing a long term future for council housing. There is now an unprecedented alliance of tenants, trade unions, councillors and MPs supporting the ?Fourth Option? of direct investment in council housing.

There is deep resentment against politicians who are trying to destroy a key public service that commands so much support. Many tenants have rejected privatisation several times and many of those who reluctantly accepted ALMOs are worried that they might be cheated out of reverting back to the security of the council once the improvements have been completed. Many elected local councillors are angry at the way their role is being undermined. Trade unionists working in the public sector want to provide quality public services. MPs cannot understand why government is being so dogmatic when all the evidence is stacked against them.

The money?s there: if all the income from council housing was ring-fenced to spend on council housing then all council homes and estates could be brought up to decent standards. And redirecting some of the vast subsidies received by the private sector would give councils the power to commandeer available land and build first class homes for all those who need them.

We sincerely hope that the new Minister genuinely wants to allow councils to build new and improve their existing homes and estates, so that council housing all over the UK becomes again housing of choice ? not housing of last resort.

All the evidence shows that this is clearly what tenants want.

[Huguenot]

"Stole the money"????!

You can't steal from yourself. The government are the democratic representatives of the voting public, and the money was recovered from the public purse to be returned to tax payers.

I appreciate many people's recall of the 70's will be foggy, but the UK's a damn sight better place now than then. The 70s were a product of indulgent social support from the post war days generating a nation of indolent, ignorant proles who thought the world owed them a living.

Thatcher, for all her faults, was voted in by a public despairing of an unrewarding society spiralling down to the lowest common denominator.

Better Thatcher than the emerging kakistocracy.

[Huguenot]

I've just read that, and it was an unbundled vomit of nonsense and dogma. What are you trying to do, bore us to death?

You'll never get elected that way ;-)

[ChavWivaLawDegree]

And from Mr Hugs report:

"However, there are exceptions to this picture of general improvement: overcrowding against the bedroom

standard has deteriorated in London, particularly in the private rented sector; social tenants

enjoy less space per person than other tenures, less than they did a decade ago, and are

more likely to be dissatisfied than others if they are living with little space; the use of

temporary accommodation is more than double what it was a decade ago ...

While post-War provision was aimed at households on a range of incomes, since

the 1980s provision has become more tightly constrained and new lettings focussed on

those in greatest need. As a result, the composition of tenants has changed, with tenants

much more likely to have low incomes and not to be in employment than in the past or than

those in the other tenures."

[ChavWivaLawDegree]

Whatever you want to call it Mr Hugs - but the council tenants rent and revenue from the sale of council stock is going into the treasury pot - so who is subsidising who?