In the largest return to date, Sheffield City Council has agreed to retake control of its former housing stock a year earlier than originally planned. The move has delighted housing campaigners seeking to reverse the long-term decline in council housing, which was once the cornerstone of Britain’s housing market.
In February eight out of nine tenants with Sheffield Homes, an arms length management organisation (ALMO) established in 2004 to manage housing on behalf of Sheffield City Council, voted to become council tenants once again. At the time the council’s contract with the ALMO was set to end in March 2014, but now it has been agreed to integrate services by March 2013 and end the relationship.
The 42,000 homes transfer is the largest so far in an emerging trend where Councils retake control of their former housing stock.
Rotherham Council retook control from an ALMO on 1 July and in Leicestershire, Charnwood Borough Council is set to dissolve Charnwood Neighbourhood Housing and again manage its 5,700 homes. Consultation with tenants had shown three quarters favouring a return.
Sheffield tenant Shirley Frost is a member of the national Defend Council Housing (DCH) campaigning coalition of tenants’ associations, trade unions, councillor’s and MPs.
She said: “It’s great news that the ALMO is ending earlier. It was undemocratic and distanced tenants from the decision makers. ALMO’s are one step towards privatising housing and are part of a strategy designed to sell off council services and facilities.
Tenants are coming back round to wanting Council Housing and there are plenty who would welcome the chance to have similar housing if it was made more widely available.”
DCH instead wants direct public investment in ‘a new generation of first-class housing, with lower rents, secure tenancies and a landlord tenants can hold to account.’ In line with this 44 MPs, of which just one is a coalition government member, have signed an early day motion on ‘Housing Emergency – Time for an Alternative.’ Britain has 2.5 million council homes and the MPs are concerned that five million people are on waiting lists for social housing.
Yet with radical changes announced by the Government on council housing finance there seems little likelihood of a return to the days when 168,000 council houses were built in 1950.
The decline set in when a generation later under Margaret Thatcher the ‘right to buy’ saw more than two million tenants take advantage of significant discounts to purchase their homes.
Labour maintained the policy and introduced large-scale ‘stock transfers’ to ALMO’s and housing associations, which could then access refurbishment finance. Sheffield Homes obtained £700 million under such an arrangement.
Seeking to revive ‘the right to buy” the Government is now offering council tenants a discount of up to 60%. Councils face selling a £100,000 home for £40,000 and meanwhile any new homes built from the receipts will see new tenants required to pay 80% of local market rents.
Meantime councils are facing restrictions on the amount they can borrow and under the Localism Act 2011 have to make council housing self-financing. There is also a £257 million bill for necessary maintenance - which putting off till later may see it rise- to ensure all properties reach the ‘decent homes’ standard. Rents will be going up 7.8% next year and future rises are guaranteed under the Government’s harmonisation policy in which council rents will converge with the housing association sector by 2015-16.
As to whether the Council would be considering future council housing construction the spokesperson couldn’t say but referred to “our work with Sheffield Housing Company to build 2,300 new homes for sale, shared homes and rent over the next fifteen years.” Phase one is just about to start, but of the 305 new homes being built on land the council has put into the project just 25 will be for affordable rent.
“We can deliver a first class housing service by making it easier for tenants to get the housing and other council services they need, spending a bigger proportion of money on front line services and homes and giving tenants and leaseholders a bigger say” said the spokesperson.