Policy Exchange on Council Housing

The right-wing think tank, Policy Exchange, has published a report today entitled "Ending Expensive Social Tenancies".  It is an unfortunate title for a paper which raises some interesting questions which we have to grapple with in Southwark.

Firstly, the blanket policy proposed by the paper of selling-off all council properties above a certain value is flawed and would undoubtedly lead to the removal of genuinely affordable social housing from certain areas.

But the concept of making sure that your assets are used well to ensure that you are tackling the serious problem of a shortage of affordable council housing is worthy of consideration.  It is one of the motivations which lies behind our proposal of accepting "in lieu" payments from developers rather than requiring them to deliver on-site "affordable housing" where that "affordable housing" is anything but.  On one site in the north of Southwark a person would have had to be earning in the region of £80,000 to be able to afford the payments on the affordable housing which would have been delivered under the scheme.  We think it is better to take a payment from that developer - equivalent to over £100,000 per habitable room that they should have delivered - so that we can build genuinely affordable council housing with rents closer to £100 per week.

The fund of £100 million that this will generate will deliver 1000 new council homes in Southwark - more than have been built in all of London in the last 10 years.

We have also been criticised for selling council properties where the cost of refurbishing that property for future tenants is uneconomic.  This probably comes closest to the Policy Exchange proposal, but is very different from it and is really no more than a pragmatic way of partly funding our Warm, Dry and Sage 'decent homes' programme.  We are committed to investing £326 million in our council housing between now and 2016 - the largest programme of any social housing landlord in the country.  But we cannot pay for that just by hoping that it will be paid for!  So where the proper opportunity arises we have agreed to sell some more expensive council properties in order to partly fund those works.

Housing stock should not be static or preserved in aspic for eternity; it needs to be dynamic and responsive to the needs of the changing community it serves.  Over 40% of all new housing built in Southwark in the past 2 years has been affordable housing.  This reflects the growing demand we face in the borough - with 20,000 people waiting for a council home - but also underlines our commitment to ensuring that we have genuinely mixed communities across Southwark.

This is where the Policy Exchange approach goes horribly wrong.  You do not need to choose between purely private or purely social housing in an area - you can have both.  But you have to be imaginative and properly use your resources.  We might not have affordable housing within certain premium developments in the north of the borough, but we will have new genuinely affordable council housing just a short distance away.

For 8 years when they ran Southwark Council Simon Hughes and his local Lib Dem councillors fretted and moaned about council housing in Southwark.  They had no idea how they were going to fund 'decent homes' works; they had no timetable for doing those works; and delivered no new council housing for Southwark.  I am proud that Labour in Southwark has a fully funded and timetabled programme to bring all our council housing up to an acceptable standard by 2016; I am proud that we are thinking about the long-term with our Housing Commission which is looking at how we retain and maintain our council housing for the next 25 years after 2016, and I am proud of our commitment to build 1000 new council homes.

Being in government, whether local or national, is about taking decisions, showing leadership and solving problems.  It is too easy to sit on the sidelines like Simon Hughes and pretend that you are in opposition when you are in government; pretend you are providing leadership when you are providing none; and criticise those who provide the leadership and take the decisions which you are incapable of providing and taking.

Southwark is an exciting and optimistic borough; where our housing problems provide as many opportunities as challenges.  Whilst Policy Exchange's solution isn't right for Southwark, it places the focus back on the future of council housing and building new homes for people who need them at rents they can afford.  The debate it has provoked is needed now more than ever.