The headline in today’s Financial Times reads: “Osborne eyes privatisation of stake in social housing”. It signifies the Tory endgame for social housing in England. It marks a dramatic step away from anything approaching ‘one nation’ conservatism.
According to the Financial Times, the plan is to sell off the government stake in housing associations. The excuse is that the Office for National Statistics (ONS) has reclassified housing associations as public sector bodies. When seen as private sector their borrowing was not counted as part of the public sector debt. Reclassification would add about £60bn – not good for ‘deficit reduction’ propaganda. The reality is that this has actually been long planned. It would amount to one of the biggest privatisations so far.
Last year, the influential think tank Policy Exchange set out a plan for full privatisation of housing associations in a report called “Freeing Housing Associations”; housing associations are not an innocent party in this.
Many housing association chiefs have publicly backed away from the naked commercialism typified by Genesis and by its boss’s planned abandonment of social housing. But his response quoted by Inside Housing that if only a third of associations admit to abandoning cheap rented housing “He suspects the other two thirds are ‘lying’”, has credibility.
The National Housing Federation signed up to implement the governments ‘right to buy’ proposals arguing it would prevent the ONS reclassifying them; we now know that failed. They also bargained measures of deregulation that will make it easier to move away from a social role. The effect of this agreement was to let the government avoid a Parliamentary debate. In defence of this they claim that it was inevitable that the government would have won although The Spectators normally well informed political correspondent Isabel Hardman reported that the Tories would have faced a serious rebellion and could have won. There are very honourable exceptions but no one could say that the ‘leaders’ of the social housing sector are putting up a stout defence of social housing.
The government – following Policy Exchange – apparently hope that with more debt and no grant, but ‘reinvented’ and ‘prepared to take more risks’, associations will build more homes. Experience, and common sense, suggests that fewer homes have been built as grant has been cut! More borrowing will cost – and higher risks will increase the cost of their borrowing: that will mean higher rent and worse services for tenants and leaseholders. Speaking to the Communities and Local Government committee in parliament, Housing Minister Brandon Lewis has already distanced himself from the modest target of building a million homes by the next election. Perhaps that’s wise; these policies simply will not get truly affordable homes built.
Housing is at the top of the political agenda and Labour now has an excellent opportunity to put forward the case for a big programme of council house building. Jeremy Corbyn hit the nail on the head when he said in his conference speech that there can be no solution to the housing crisis that does not start with a big programme of building council homes.
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This feels lessBlog comment creation like an accounting fix and more like a deliberate shift in housing policy. By framing the ONS reclassification as the trigger, the government sidesteps a deeper debate about whether social housing should be treated as a public good or a market asset. The real worry is that once housing associations are fully privatised, the priority of providing affordable homes could be permanently sidelined.
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