Memorandum by Jim Wintour (AFH 36)
1. THE PROBLEM
So far as affordable housing is concerned,
the United Kingdom is divided into two countries; separate and
unequal; one North, one South. In parts of the North, affordable
housing is in surplus. In much of the South, affordable housing
is in acute shortage.
In the North of the United Kingdom, tens of
thousands of good houses have been demolished. The estate I used
to live on in inner Glasgow still stands, but all around the homes
have been demolished and replaced with grass. From the air it
looks like a village in the country. About a further 10,000 affordable
homes are likely to have to be demolished in Glasgow over the
next decade. In Knowsley about 8,000 homes will have to be demolished.
A similar pattern is repeated in Liverpool, in Newcastle and in
County Durham. Tens of thousands of affordable homes, and scores
of schools, are being demolished.
In London and the South, the problem is the
opposite. There is a desperate shortage of affordable housing.
In 2000/1 London boroughs were legally required to house 29,685
homeless households. Yet only 35,164 council house lettings and
housing association nominations (excluding transfers) became available.
One third of London boroughs were legally required to house more
homeless households than they had social housing lettings available.
In 2002-03, after the 2002 Homelessness Act
comes into force, most London boroughs are likely to be legally
required to house more homeless households than they have social
housing lettings available. And this would theoretically mean
these boroughs housing no teachers or nurses or people in acute
medical or housing need.
The paradox of a surplus of affordable housing
in the North and a shortage in London has a simple explanation.
The population of Scotland, the North East of
England and the North West of England is static or falling.
The population of London is growing. DTLR population
projections estimate that London's population will grow by 538,000
in the twenty year period between 1996 and 2016 reaching 7,608,000.
The number of households is expected to increase by 517,000 over
the same period. Because of the 2002 Homelessness Act the growth
in demand for one of the main forms of affordable housing in London,
social housing, is likely to be particularly fast.
At the same time the supply of social housing
in London is falling. The number of social housing units in London
has fallen by 62,600 from 877,000 in 1990 to 814,4000 in 2000,
largely owing to the effects of the Right to Buy outpacing the
building of new housing association properties. The total stock
of social housing in London is projected to continue to fall over
the next twenty years. Yet the Government spent about £500
million on social housing in London in 2000/2001. It could be
said that at a cost of about £500 million a year the Government
is reducing the amount of affordable housing in London.
The Mayor's Housing Commission suggested that
about 224,000 more affordable homes will be needed in London over
the next twenty years and that the net affordable housing capacity
is only about 75,000 homes.
3.1 A More Active Regional Policy
The central need in United Kingdom public policy
is a more active regional policy. We need to steer some of the
growth in population and employment from the South to the North
of the country. At present, the United Kingdom only spends 30
per cent of the European Union average per head on regional aid
in areas of high unemployment. France spends twice as much as
the United Kingdom on regional aid to firms. Italy and Germany
spend six times as much as the U.K. And regional aid works. There
is a substantial body of research that points to the capital incentives
of the 1960s and 1970s as having created over 600,000 jobs in
the assisted areas of the North, Scotland, Wales, and Northern
Ireland (Regional Studies Association, Labour's New Regional Policy,
November 2001, pages 18 and 11)
A better funded regional policy would not merely
tackle the paradox of a glut of affordable housing in the North
and a shortage in London.
it would reduce the congestion in
London, congestion that may make it difficult for London to compete
as a financial centre with Frankfurt and Berlin;
it would reduce unemployment and
therefore crime and inter-communal tensions in places like Burnley
it would save the vast costs of demolishing
homes, schools and hospitals in the North and at the same time
as building 500,000 additional homes in London over the next 20
it would help to deliver on the Government's
key manifesto commitment at the last general election to deliver
improved public services by reducing the shortage of nurses, teachers
and so on in the Southa shortage partly caused by the shortage
of affordable housing.
3.2 Restrictions on the Right to Buy in Areas
of Housing Pressure
The effect of Government policy is to spend
about £500 million a year of public money in London reducing
the stock of the main form of affordable housing, ie social housing.
This is because of the right to buy.
In Scotland, the 2001 Housing (Scotland) Act
Section 45 permits the Scottish Executive to restrict the right
to buy in areas of housing pressure. An alternative might be to
re-cycle capital receipts in areas of housing pressure.
3.3 Registered Social Landlords (Housing Association)
Government policy is to transfer many council
houses from council ownership to housing associations. At the
same time the statutory duty to house homeless households remains
with local councils. There can be no future in local councils
being legally required to house the homeless while housing associations
increasingly own the houses.
In Scotland, the 2001 Housing (Scotland) Act
Sections 4 to 5 places a legal duty on housing associations in
Scotland to help local councils to house the homeless. An alternative
might be to change the law so that London boroughs could discharge
their duty to homeless households with the offer of accommodation
in an area of housing surplus.
The ideas in this paper may seem a little radical.
However, the problems that we face are so severe that we need
courage. The surplus of affordable housing in the North, and the
shortage of affordable housing in the South can not be ignored.