Nationalisation, privatisation and the future of social housing

Rock and Orr

Labour's Caroline Flint started her brief term as housing minister by making herself popular, writes Mark Cantrell

First published in the February 2008 edition of Northern Housing

Caroline Flint MP
THE word was nationalisation – cue the shudders of horror and the howls of outrage, for this is the bright and bountiful 21st Century, not the shabby and fashion-challenged 1970s, so how can it be that this Jurassic Policy can be heard a thundering across the landscape? Something has gone horribly wrong.

No, this isn’t the saga of troubled Northern Rock, the Newcastle-based bank that has, so to speak, metaphorically defaulted on its mortgage and has been expecting the Government to pay off its debts and leave it in possession of the keys and the deeds.

It was in the arena of social housing that this particular invocation of the ‘N’ word caused paused for thought and the consideration that something is afoot.

David Orr, chief executive of the NHF, shot the word across the Government’s bows in the course of the argument raging over the Housing & Regeneration Bill that is slowly being crunched through the Parliamentary legislative procedure.

The word nationalisation, with the strength of feeling it invokes, is clearly a testament to the outrage and the deep felt concerns of the social housing sector to proposals drafted in the Bill – that it is alleged will effectively curtail the independence of housing associations and turn them into de facto agencies of state.

It’s not just the sector’s independence that is under threat, the organisation believes, but also the Government’s own targets for the delivery of millions of new homes by 2020. In short, the strategy to solve the housing crisis is in danger of becoming unravelled, according to these concerns.

“We are very supportive of the Government’s commitment to tackle the nation’s housing crisis and housing associations are keen to do whatever they can to respond. However, we are shocked that the Housing Bill, as it is currently drafted, would create a real danger of associations effectively being nationalised,” Orr said.

Some of the NHF’s key concerns are that the Bill, if passed as is, will grant the secretary of state the power to direct the regulator to set standards for housing associations; the new regulator may regulate non-housing activity, leading to the stifling of innovation and flexibility; and the regulator may then intervene because standards have not been met rather than because there is mismanagement or misconduct.

In that view, then, regulation will become an effective mechanism of direction, leading to central Government to have a more direct and intimate involvement in people’s everyday lives in their own communities – dare one suggest not merely nationalising housing associations but nationalisation of neighbourhoods too?

Whispering mouths of conspiracy have inevitably suggested that the amendments are deliberate, but the NHF says that many of its member organisations have received private assurances that the problems are the source of badly written draft clauses and are therefore unintentional. However, the organisation remains concerned that this ‘poor wording’ has been left to carry. Conspiracy by cock-up?

“Whether or not poor drafting is to blame, the fact is that we have yet to see action to correct the problem,” said the NHF’s assistant director of neighbourhoods, Helen Williams.

“Hundreds of Government amendments have been tabled so far, but none seek to seriously check the level of state control. We are delighted that committee members have pressed the minister Iain Wright to look again at whether the Bill pushes housing associations into the public sector, but the regulator still retains a vast amount of control over the activities and constitutions of independent organisations.”

The Bill has completed its House of Commons committee stage; the next key stage will be the Commons report and Third Reading, expected early next month. The lobbying and the future over this issue is set to continue.

Housing associations are not the only ones to be disgruntled over the Housing & Regeneration Bill.

The NHF’s longstanding thorn, the Defend Council Housing (DCH) campaign has also taken a stance against the Bill, although from an entirely difference angle. Calling for tenants and trade unionists to lobby Parliament earlier this year,Austin Mitchell MP, a vocal supporter of the campaign, said: “The Bill, as it stands, continues the discrimination against council housing. Profit making landlords can apply for Social Housing Grant. But councils cannot unless they set up arms length companies. Why? Councils are being cajoled and bribed to put public land into public/private partnerships (Local Housing Companies) that will build private – not council – housing...This all falls a long way short of the ‘warm words’ for council housing we heard [last] summer from Ministers, would-be Deputy Leaders of the Labour Party and the Prime Minister himself.”

The NHF and DCH have, of course, long been sparring partners. The DCH campaign has campaigned against LSVT to create new housing associations, and has railed against what it says is privatization. This is something that has been vociferously denied by the NHF. There’s an inherent irony, then, to Orr’s invocation of the spectre of nationalisation.

So, just to stir the conspiracy pot a little more, do the controls inherent in the Bill represent not a stand for ‘nationalision’ of the housing association sector, but a driving force intended to push the larger associations into the private sector?

To some of its critics, after all, Brown and Company and not so much unreconstructed socialists, as Neo-Liberal privateers, so is this a plot to force the sector’s hand into making DCH’s fears and accusations come true?

There’s nothing like a good conspiracy theory to raise a smile, especially given the tales of lost data disks, stolen laptops, and the new housing minister’s less-than-endearing introductory gaffe; it more suggests a plot unravelling than a plot fulfilled.

Campaign donations, of course, led to the departure of Peter Hain, head of the DWP, which meant an impromptu reshuffle and a change of face on the housing front. Out to the Treasury went Yvette Cooper, and in came Caroline Flint. It didn’t take her long to start living up to her name and shed a few sparks into the tinder.

In her speech to the Fabians, to cut a long story short, she suggested a stern turning of the screw for social, and especially council, housing tenants – ‘work or lose your home’. The notion of turfing out a claimant onto the streets caused howls of outrage at DCH, Shelter and the NHF too.

“It would mean a return to the workhouse, the destruction of families and communities and would add to the thousands who are already homeless,” said Shelter’s Adam Sampson. Still, one could say that Flint has certainly made an impression. A great start to a new job and a new year. The year ahead is certainly looking interesting.

This article was first published in the February 2008 edition of Northern Housing magazine. It was subsequently re-published on the Housing Excellence website, 6 March 2008

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