In November the Minister for Communities announced plans to reclassify the Northern Ireland Housing Executive as a housing ‘mutual’. Housing activist Glyn Robbins explores the record of mutuals in Britain, arguing that this reclassification amounts to a privatisation that will make matters worse.
Soon after being elected in 1997, Tony Blair made it clear that, just like previous Tory Prime Ministers, he wanted to get rid of council housing by giving it to new types of landlord. Since then, about 1.4 million secure, truly affordable, publicly owned, democratically controlled homes have been lost through “stock transfer”, part of a dramatic erosion of council housing, from one-third of homes in 1979, to 8% today.
Now, in a grim echo, Stormont wants to privatise what’s left of the Northern Ireland Housing Executive (NIHE), by turning it into a ‘mutual’. 85,000 homes are at stake. The interim Communities Minister, Caral Ní Chuilín, has dressed-up privatisation in feel-good, fluffy language, while claiming it’s the only way to get adequate investment for the homes of NIHE tenants. Looking across the Irish Sea, she says, “we can learn from best practice” and “avoid pitfalls”.
Those ‘pitfalls’ are well known to council tenants in England, Scotland and Wales.
Although some repairs and improvements to people’s homes have happened, they’ve come at a heavy price and are based on false economies and false choices. As long ago as 2003, a National Audit Office report found that improving council homes through direct government investment is far less expensive than doing it through privatisation. Although some aspects of the housing finance system have changed since, if anything, that argument has gained strength, particularly considering that public housing authorities, like the NIHE, can now borrow for investment at virtually zero interest rates.
In other places, stock-transfer has unleashed the culture of the corporate property industry. There may have been some local variations, but overall, the picture of council housing privatisation has been the same everywhere. A new landlord brings in weaker tenancy agreements, with fewer legal rights and before too long, rent rises.
Tenants get all sorts of promises, but these aren’t usually legally binding and are often broken. Improved services may not materialise and when they try to complain, tenants and elected politicians find they are now dealing with a less accountable landlord.
Bureaucracy increases and so do the salaries of senior managers and fees to unnecessary consultants, while the pay and conditions of frontline workers are attacked. If the new landlord starts building homes, many of them will be for sale in the private market and often take the place of social rented homes that have been demolished, also leading to displacement and the destruction of communities. Once strong, independent tenant associations become neutered.
Housing privatisation is a one way-street – and it’s important to remember that it’s not just homes that are privatised, but the land they’re built on.
The mutual experience
The Stormont administration is trying to distract attention from these issues by emphasising that the NIHE will become a ‘mutual’, a reassuring sounding word that conjures images of co-operation and benevolence. Again, experience elsewhere suggests otherwise.
A mutual will be legally constituted as a private business, just like Housing Associations, many of which started life as charities, but have now become multimillion-pound businesses. Being private organisations means they are legally unable to provide permanent secure tenancies, of the kind that have sustained council housing for 40 years. It also means that their meetings will probably be held in private and they will not be subject to Freedom of Information legislation.
Increasingly, housing associations and their ilk are unregulated, allowing them to switch between social and market housing activities, as suits their business plan. Many have become involved in shaky ventures which, in some cases, have led to serious financial losses.
Rochdale Council, in Greater Manchester, transferred its council housing to a mutual in 2012. In 2016, the new landlord announced it wanted to demolish 450 former council homes and replace them with 120 homes for private sale, provoking cries of “social cleansing”.
Like Stormont, and many other local authorities, they claimed this was the only way to get the money to repair other blocks. Now, hundreds of the homes stand empty, at a time when there are thousands on the local housing waiting list. In response, Rochdale councillors have demanded the demolition plans be scrapped, but the ‘mutual’ landlord has so far ignored them, aware they’re no longer subject to democratic accountability.
In 2003, council tenants in Glasgow were told a similar story to the one NIHE tenants are hearing now. Privatisation was disguised as transfer to local ‘community’ organizations, several of which have since gone bust or been mired in scandal.
Glasgow used to have a similar amount of council housing to the NIHE, but since the new housing association landlords took over, half of the original 80,000 have been demolished. Dramatically reducing the supply of genuinely affordable homes has had a huge impact on housing provision in the city, where rents in the private rented sector, which has become the only option for many, have risen steeply.
There’s a similar pattern in many English cities. Perhaps the worst example is the Elephant and Castle area of south London, where 1,212 council homes have been demolished on one estate, replaced by less than one-hundred homes for social rent. Instead, nearly 3,000 private homes have been built by a private developer, on land that used to be publicly owned. The new ‘luxury’ homes are completely beyond the means of most local people (lots of whom have had to move out of the area) and many now stand empty.
Whatever is said now, if the post-Brexit north of Ireland enjoys an economic bounce, the temptation for the new mutual landlord to jump on the speculation bandwagon could prove too strong.
The transfer of public housing to new landlords is really a form of blackmail. Tenants are told that, if they don’t agree, they will be condemned to a future of sub-standard homes; while if they vote for transfer they will get new kitchens, windows, roofs, and so on. This blackmail comes in glossy brochures and meetings in posh hotels. In Edinburgh, where the tenants voted against stock transfer, the city council spent over £2.6 million on the transfer process.
Stock transfer of public housing can also be very divisive. It encourages different communities to vie with each other for funding and political support, at a time when we need maximum working class solidarity to combat the threats of another wave of austerity when the government tries to make us pay for the COVID pandemic.
Campaigners have always argued that there are other options. In Britain, councils could use their collective bargaining and political power to demand more money from Westminster. The value of land and existing and future homes could be used to borrow against.
Council housing consistently pays for itself over time by reducing other forms of public expenditure, like reliance on Housing Benefit which costs nearly £25 billion a year, or the cost of putting homeless families in expensive temporary accommodation. Some of the “debt” council housing carries is based on arcane accountancy practices. It could be written-off at the stroke of a civil servant’s pen.
One way to ensure these alternatives are heard is to insist that transfers of council housing only happen after tenants have agreed to it through a transparent, democratic ballot, held on a level playing-field.
There’s not enough detail in the NIHE plans to say if, when or how this will happen. But if the full arguments are aired, many public housing tenants reject transfer, just as they did in Ballymena and Ballyclare in 2017/18 and has also happened on several occasions in England, where some tenants who voted in favour of transfer are now demanding the right to return to the council.
For example, in 2002, the 84,000 strong tenants of Birmingham City Council rejected a proposed stock transfer (66.8 per cent voting against transfer). Four years later the Council re-balloted their tenants, who again rejected stock transfer (this time by a larger margin of 75 per cent). Birmingham City Council is now building hundreds of new homes, for public rent, each year.
A similar experience occurred in Edinburgh where council tenants voted to reject transfer in 2005. These examples, in NI, Birmingham and Edinburgh, all have one common element – there was a strong anti-privatisation campaign led by tenants and supported by trade unions. These campaigns produced leaflets and newsletters, covered estates knocking on doors, held public meetings and explained what the process of transfer, or “reclassification” in the NIHE’s case, really means.
The future …
After decades of decline, the political and policy tide may be turning back towards public housing. In London, many authorities and the elected Mayor are starting to move away from stock transfer and housing associations because experience has shown they don’t adequately meet housing needs.
Fighting for and winning real investment in council and NIHE housing, with no strings attached, is a tough battle, but one that future generations will thank us for.