#13. There must be a money tree somewhere.


First appeared in the Highley Forum and Highley News, October 2015

In last month’s article I mentioned how local authorities got a bit of a kicking from the public for not “building enough houses for local people”, particularly housing that is actually affordable to local people, and how this was often misguided criticism, pointing out that it was often the case that local authorities were left carrying the can for housing developers who were screwing the system, and screwing the system with what often appears to be the connivance of central government.

And so it goes on, although just the government this time, developers being in the clear.

The more informed amongst you will have seen George Osborne’s Summer Budget proposal to cut social housing rents by 1% over the next four years from April 2016. Good news for existing tenants but what of the rest, those anxiously sitting on what appear to be ever extending waiting lists? Well, not good news because that modest sounding cut in rents will result in a revenue reduction that will mean fewer homes are built, a lot fewer homes!

Joined-up thinking? Come on, please. You’ll be asking for a more effective balance between the needs of present and future tenants in the longer term next.

The numbers are out there if anyone wants to seek them out, but suffice to say that according to the Local Government Association the annual funding gap will represent 60% of local government’s total housing maintenance budget.

Nice bit of jiggery-pokery by some Treasury clown because as 70% of social housing tenants receive housing benefit that rent cut will not impact those tenants directly, but it will be reflected in the Department of Work and Pensions’ budget, which means the Treasury is quids in because it is local councils that will be carrying the additional financial burden in the form of lost rent revenues.

Shropshire Council has thousands of people on its housing waiting lists and central government keeps beating it about the head to get on with building the homes that local people desperately need, but as Shropshire Council’s housing investment plans are based on a forecast of future rent levels, if you introduce uncertainty into that forecast you don’t need to be a financial genius to see the real scale of the problem when something like Osborne’s Summer Budget is dropped into the mix. What price your carefully crafted Local Plan then?

Believe it or not, local authorities don’t need to be reminded of the desperate need for more housing, they get letters and phone calls from local people every day. Perhaps they should be diverted to Westminster.

As well as being developers in their own right through Shropshire Towns & Rural Housing (yes, I will give them credit where it’s due), Shropshire Council also enable the work of housing associations and developers to get more homes built. And at this point I’ll remind everyone that if I object to development it’s too much development in the wrong place.

Housing is a hell of a fraught area. The considerations aren’t complicated but they are complex and government intervention doesn’t help – at all – especially when it’s added to the problem of some developers working to their own agenda and it’s often not one that sees a responsible mix of housing being built where it’s needed. And therein lies the conflict of interest between social need and profit regardless of its cost to local communities in terms of loss of amenity and impact on local infrastructure.

Councils are desperate for the flexibility and power to manage their housing stock to meet the needs of local communities (and employers) over the long term. Government should, at the very least, allow local authorities to keep all receipts from the sales of their own housing stock, itself a contentious subject because building has never kept pace with selling-off and so replacement isn’t happening. All of which will be compounded by the scheme to extend the right-to-buy to housing association tenants, a move that will further reduce the building of social housing because councils will be obliged to compensate housing associations for such sales. Sales of local authority social housing will be needed to fund that compensation.

As if all that wasn’t enough, in another stupid move, government exempted developments of fewer than 10 units (5 in rural areas), and empty buildings, from contributing towards affordable housing allocations. Happily, that policy was recently overturned by the High Court as a result of a legal challenge that ruled the policy illegal BUT, despite Shropshire Council’s portfolio holder for planning Mal Price explaining to Brandon Lewis MP, the Minister responsible for that particular piece of lunacy, the adverse impact on Shropshire Council’s ability to fund the building of affordable housing, Lewis’s Department for Communities and Local Government is expected to appeal against the ruling.

Knowing the bull-headedness of this government and their congenital inability to admit to a mistake, I doubt Lewis will back off and he certainly won’t consider a request for, at the very least, a system that allows Section 106 obligations (which can include a contribution towards the provision of affordable housing) to be asked for from developers of smaller sites if the needs of local communities warrant them.

So, can someone point out where the magic money tree is that central government seems convinced exists?

What do you mean there isn’t one?