Council and Social Housing

Debate between Heidi Alexander and Bob Russell

Tuesday 6th March 2012 Westminster Hall

[Heidi Alexander]

My hon. Friend gives the short answer. The current Government’s record over the last two years on social rented housing has been utterly shameful.

[Sir Bob Russell]

I regret the line that the hon. Lady is taking, because I thought the purpose of the debate was to try to secure consensus—unanimity—on the way forward. However, as she wants to make a critical point, will she confirm that the previous Labour Government built fewer council houses than the Thatcher Government?

[Heidi Alexander]

I can confirm that in the last five years of the Labour Government, 256,000 affordable homes were built. [Interruption.] I obviously heard the hon. Gentleman when he asked me about council housing and I have said previously that if properties are genuinely affordable, I do not have a problem with whether they are council houses or housing association properties. He talks about the purpose of this debate. My reason for coming to the debate was to scrutinise the policies of the current Government, who I believe are failing. I am sorry if the hon. Gentleman does not welcome my tone, but it is important to put these things on the record.

Let us look at the facts of what the Government have done over the past two years. The national affordable house building programme has been cut by 63%, and there is £4 billion less to spend on new affordable homes between now and 2015 than there was between 2008 and 2011, when we spent £8.5 billion. Some 259 new social rented homes were started across the whole country between April and September last year—a 99% fall on the same period the previous year. In London, a city of 7 million people, just 56 new social rented homes were begun in the same period, which represents 8,469 fewer social rented home starts between April and September last year than in the preceding six months. That is not the record of a Government who are committed to building the homes this country needs; it is the record of a Government who are failing.

In the past few weeks, I asked a major housing association in London to provide me with figures on the number of social rented homes it has built over the past three years and what it plans to build over the next three. Its response was illuminating. Although it has averaged an annual output of more than 1,000 social rented homes—homes that have been built new—in recent years, that figure will halve in the next three years. Those projections are borne out by the amount of social housing that has been granted planning permission since the Government came to power. Last week, Inside Housing reported that the amount of social housing that was granted planning permission in 2011 was virtually half that which had been granted permission the year before. If planning permissions are not granted, the homes will not be built—it is simple.

I also question the affordability of any homes that housing associations or councils do build in the next few years, and my hon. Friend the Member for Great Grimsby (Austin Mitchell) also picked up on this issue. The Government have their strangely named affordable rent model, which allows social landlords to charge up to 80% of market rents, thereby bringing in more money to cover the costs they laid out in construction. The problem is that, in some parts of the country, the rents, which are just 20% lower than market rents, will be anything but affordable. If people in receipt of housing benefit move into those properties, will we not just be adding to the housing benefit bill again? I could be wrong, but I thought that was precisely what the Government were trying to avoid.

The supply of social housing is a function of not only what is built, but what happens to existing homes in the sector. Debates about allocation policies are all well and good, but if there is simply not enough social housing out there to meet the population’s needs, we will just be working out how to cut up the cake, knowing there will never be enough to go round.

On the overall amount of housing available at rents that people can afford, the Government’s enhanced right-to-buy proposals are particularly worrying. Like my hon. Friend, I agree with the principle of a right to buy, but when there is such a shortage of council housing, it seems crazy to deplete the overall stock of socially rented homes. The Government will argue that, for every home sold, another will be built, but I do not see how the finances stack up. Research by Hometrack in December 2011 showed that, where a £50,000 discount is applied, the average receipt from a sale would be £65,000, which would be lower than the cost of delivering a new property. That leaves aside the issue of whether the replacement works on a like-for-like basis. Will a two-bedroom flat sold under the right to buy in London be replaced by the same sort of property in a similar location?