Commission calls on London borough to consider halving housing stock

Published by Jon Land for 24dash.com in Housing and also in Communities, Local Government

If London's largest social landlord halved its housing stock by 2045, it would release funds to improve and maintain its homes to a high standard and support more housing-led regeneration programmes, according to an independent commission.

The option was one of three floated by the commission – headed up by acclaimed housing lawyer Jan Luba QC – which has spent the last 12 months looking at the future prospects of council housing in the London borough of Southwark.

Setting the scene, the report notes the local authority – which owns 39,000 council homes – faces an “enormously important problem” of aging stock, with some of the badly designed system built estates beyond repair. At the same time, the council is faced with an unprecedented demand for council housing, with the waiting list now exceeding 20,000.

The other two options floated by the commission would see the council reduce the homes it manages down to 30,000 or continue to remain as London’s biggest social landlord which, it says, would require a “substantial and sustained refurbishment and new-build programme”.

A carefully managed reduction to 20,000 homes, the report says, should cut management and maintenance costs and release more resources for improving the existing stock.

The level of stock reduction would result from Right to Buy sales, increased void sales and would also involve much faster demolition or redevelopment of the worst-condition council estates.

However, it warns that the fall in the level of rented council homes would leave many in the borough without the affordable homes they need and would mean more pressure on other social and private housing providers.

In terms of net present value, the report says halving its stock represents "the most financially positive option".

The financial sustainability of the scenarios was assessed by forecasting the undiscounted cash flow over the 30-year reference period from 2015 to 2045.

Councillor Peter John, leader of Southwark Council, said: “The council is wholly committed to council housing provision. In line with this commitment, and demonstrating the importance we place on understanding the way forward, the council commissioned an independent report, the findings of which are now public.

“We wanted to see hard facts and the commission has given us this. We acknowledge the importance of continuing to improve and we understand the legacy of past decisions, but our priority is the future.  This research will be the catalyst for opening out the discussion more widely and to develop a long-term strategy for Southwark. A wide reaching community engagement plan to discuss the report over the coming months will be agreed by cabinet in December.

“We asked a simple, fundamental question – what is the future for council housing in our borough?  However, we knew the question was easy to pose but much more challenging to address. I would like to thank the commission and everyone who submitted evidence and attended meetings for their time in helping to shape this ground breaking work that we hope will not only benefit Southwark but councils across the country."

Jan Luba QC, chair of the housing commission, said: “I welcome the enthusiasm with which the council has received our report and its commitment to immediate publication.  This must now mark the start of an informed dialogue with the residents of the Borough about the future for council housing in Southwark. Any reader of our report will immediately see the scale of the issues that need to be addressed. I hope they will also find much of help in formulating a detailed strategy - and a long term plan - for council housing in this vibrant part of inner London.”

But Southwark Liberal Democrats said the main purpose of the report was "softening people up for a council home sell-off". 

A spokesperson for housing finance and resources Cllr Tim McNally said: "Over £100,000 has been spent on this report, yet it doesn’t tell us a lot we don’t already know. The council leader is paid almost £70,000 to run the council, but when it comes to the tough decisions he pays other people to take them.

"It looks like the main purpose of the report is softening people up for a council home sell-off. It suggests the amount of council housing in the borough could even halve.

"Southwark Lib Dems continue to believe we should retain council homes across the borough and build more of them – particularly family sized properties. We agree with the report’s conclusion that to make any real difference the council would need to build 5,000 new homes.

"Despite all their talk, Labour has only managed to build 13 in two years so that figure seems a very long way away."