6 Central Government as Initiator: Housing Action Trusts

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1 6 Central Government as Initiator: Housing Action Trusts The Housing Act 1988 sets up a framework within which the Secretary of State will be able to appoint Housing Action Trusts to take over council housing in designated areas. The 1987 white paper and the consultation paper suggested that HATs would be established in inner city areas with serious housing and other social problems and in areas with a predominance of council housing. The Government has allocated 125 millions to HATs for the years 1988/89 to 1990/91. The objectives of the Housing Action Trusts will be: to take over local authority housing within the designated area; to repair, modernise and improve the stock; to improve the living conditions and general environment of the area; to secure diversity of tenure. The Government argues that Housing Action Trusts can do much to help local authorities. Where a trust is established, the government believes that the local authorities will be relieved of some of their most difficult housing stock. This should enable them to concentrate their efforts and resources on the stock that remains. The local authority would be required to transfer its housing stock to the HAT, which would be expected to remain in existence for five years. At the end of the trust s life, the tenants would be free to choose whether they want the estates to go back to the local authority, to a housing association or to private landlords. Case studies in Lambeth and Sunderland show the responses of these two local authorities and of their tenants to this initiative. 39

2 The changing role of local housing authorities Lambeth The London Borough of Lambeth extends from the south bank of the river Thames at Waterloo through the densely built-up areas of Vauxhall, Stockwell and Brixton to the suburbs of Streatham and Norwood. The borough is cosmopolitan in make-up -- about a third of the population is black, the largest ethnic groups being of West Indian origin, and there is a sizeable Irish community. Lambeth has all the characteristics of a inner city area -- high levels of unemployment, poverty and overcrowding, a declining industrial base, and large numbers of elderly people and of people dependent on social security. On Department of Environment indices, the borough ranks as the fourth most deprived in the country. The Council s HIP statement for 1989/90 showed that, of the housing stock in the borough in 1988, 43 per cent was council owned, 8 per cent housing association, 24 per cent in owner-occupation, and 23 per cent privately-rented (with the remaining 2 per cent being other public sector housing). Lambeth has a acute housing shortage, illustrated by its high level of priority homeless admissions. In 1987/88, two-fifths of all lettings of Council property went to priority homeless families. Other such families had to be placed in various forms of temporary accommodation and bed and breakfast hotels. Overcrowding is another aspect of the housing shortage. The Council s Housing Needs Survey in 1986 showed that about one in seven households were overcrowded. Much of the housing stock in the borough is in an unsatisfactory condition. The Greater London House Condition Survey showed that about 70 per cent of the stock in the council sector was in need of major renovation. Council estimates show that around 35 per cent of its stock is hard to let. Many Council estates are high density and multi-storey and have high child densities, poor environment, design faults and high levels of vandalism. The combination of poor physical environment with high levels of social deprivation are of major concern to the Council. In July 1988 the Government proposed two estates in Lambeth -- Angell Town and Loughborough -- for transfer to Housing Action Trusts. There has so far been no formal consultation with the Council. Consultants have been appointed for the estates by the Government with the objectives of putting the case for a Housing Action Trust to 40

3 Central government as initiator: Housing Action Trusts the people and assessing the extent of tenant opposition or support for the proposals. If the consultants advise the Government that there are good prospects of support for HATs in Lambeth, then the tenants will be balloted for their views. Lambeth s response Lambeth has been trying to tackle the problems of Angell Town, working closely with the tenants in improving the estate and the surrounding area. Most of the capital finance for these initiatives has come from the Housing Investment Programme, supplemented by Inner City Partnership money. With continuous reductions in HIP allocations, the Council is facing increasing difficulties in finding adequate capital to carry out such work. The Council is concerned that establishing a Housing Action Trust for Angell Town -- and for Loughborough -- will direct resources to private developers which could instead be allocated to the Council for refurbishment. The Council is opposed to the Housing Action Trusts policy, both in general (it responded critically to the Government s consultation paper on the idea in 1987, before any estates were identified) and for the two Lambeth estates in particular. In the Council s view HATs will focus attention on a limited number of areas, syphoning off finance which would otherwise be available to the local authority to tackle its wider housing problems. It fears that areas in Lambeth without such trusts will suffer. The Council argues that the imposition of the Housing Action Trust on the Angell Town estate will disrupt its own programme of work there. It also suggests that rent levels will increase, that new lettings in the borough will fall and that the renovated properties are unlikely to go to people in the borough in the greatest housing need. The Council is particularly concerned that members of ethnic minorities will suffer. A Council officer has been given special responsibility to oversee and coordinate the responses of all council departments within the HATs areas, including measures to improve service delivery. At the same time the Council has been supporting tenants campaigns against HATs. A tenant liaison team has been established to operate on the estates to establish close working relationships with tenant groups, to act as intermediaries for the Council and tenants and to provide tenants with information about HATs. 41

4 The changing role of local housing authorities At the request of the tenants, the Council has decided not to co-operate with the consultants and has denied them ready access to information, premises and other material which would be of use to them. Tenants views There has been a mounting public concern throughout both proposed Housing Action Trust areas in Lambeth. Since July 1988, when the Government indicated its intention of creating the trusts, tenants in the two estates have been campaigning to stop them being set up. Tenants are worried that the trusts will redevelop the estates in a manner disadvantageous to them. When the Housing Bill was originally drafted, there was no provision for a ballot of tenants on whether they wanted a Housing Action Trust or not. Following a tenants lobby on the 28 July 1988, the House of Lords amended the Bill to include the right for tenants to vote for or against the HAT, and making the designation of HAT conditional on a yes vote. The tenants have several anxieties. Many are worried that homes will be sold off to developers to provide owner-occupied housing for people with high incomes, as there appears no guarantee that properties will not be sold on the open market. They believe that, following demolitions and the construction of new homes, there will be fewer homes at the end of the day. They fear that the property retained for rented housing will be relet at unaffordable rents, and they are uncertain about future changes in their conditions of tenure and other rights. The tenants campaigns have been growing steadily, through public meetings and campaign planning meetings. Posters and leaflets have been distributed throughout the estates, highlighting the disadvantages of the new proposal. Tenants in both the estates have formed a Joint Campaign Coordinating Committee to pool their efforts, and are working closely with associations in other areas in Sandwell, Southwark, Sunderland and Leeds, where HATs are likely to be implemented. Sunderland Sunderland is a large urban centre in the north-east of England, close to Newcastle upon Tyne. Its population has been declining since the 42

5 Central government as initiator: Housing Action Trusts early 1970s. The local shipbuilding industry, formerly the biggest local employer, has declined dramatically but the economy has benefited from some growth of employment in light manufacturing industries. The Council owns about 42 per cent of the total stock in the borough of Sunderland. Three per cent of the dwellings are in the housing association sector. The largest tenure is owner-occupation, comprising 53 per cent of the total stock. Four of the Council s estates have been proposed for Housing Action Trusts. They are Downhill, Hylton Castle, Town End Farm and parts of Red House. The proposed HAT areas contain 10 per cent of the council stock. Within the HAT areas council ownership remains the predominant tenure. In the last few years, however, the proportion of non-local authority dwellings in these areas has increased, mainly because of the right to buy policy, from 5 per cent in 1981 to 16 per cent in In the last two years, an upsurge in the number of right to buy applications are believed to have been stimulated by concern about the HATs proposal. The estates in the proposed Housing Action Trust areas, comprising 6,500 dwellings, were built between 1953 and 1967 to cater for the rapid population growth during this period. The Council s policies in these areas in the past have aimed at modernising and improving the stock. To this end, the Council invested some 13 million in the six years up to 1989/90, completely upgrading around a third of the dwellings. It has been estimated that a little under 30 million more is required to complete the modernisation programme and schemes of associated environmental improvement in the HATs area. The Government has indicated, on the basis of a report by the consultants it appointed, that the estates suffer from the problems which Housing Action Trusts are designed to treat. According to the Government, the trusts would institute modernisation and development programmes aimed at transforming the physical fabric of the estates and the economic and social welfare of their residents. Depending on the results of the ballot in March 1990, the implementation of the Housing Action Trust will proceed. 43

6 The changing role of local housing authorities The borough s view Sunderland Borough Council does not reject the Government s approach. It sees advantages in establishing HATs for its estates. The improvement and modernisation work already carried out on some of the estates proposed for HATs was made possible under the Government s Estate Action programme. The Council recognises that a lot of work still needs to be done, and that it will not be easy for the Council itself to find the resources needed. The Government is thought unlikely to increase the HIP allocation to the borough. One of the attractions of the HAT proposal is that it should meet the housing needs more quickly because of the easier access it would give to financial resources. The Council has some serious concerns, however. It is unhappy that the resources being made available to the HATs have not been given to the Council instead. It does not believe that there should be a need to change ownership in order to achieve the desired objectives. It was initially worried that the stock would not return to municipal ownership after the HATs had completed their work. The Council sought an assurance from the Government that it would be able to buy back the estates and would be given the resources to do so. The Government has now given these assurances. Sunderland Council has throughout cooperated fully with the government s consultants, providing them with detailed information on housing conditions, socio-economic characteristics and future improvement programmes in the HAT areas. The Council has all along maintained that the ultimate decision over the HATs is for the tenants to make. As in Lambeth, the initial Government decision to implement HATs without consulting tenants aroused local anger. Following protests, the Government gave its consent to a ballot, which would decide whether tenants would be under the control of HATs or remain with the Council. The report by the consultants commissioned by the Government showed that the tenants were primarily concerned about future rents and security of tenure and feared not being able to return to local authority tenancies at a later stage. Most tenants felt that, despite the financial problems, the Council was doing a satisfactory job in running the estates. Many said that they would ideally like more money to be given to the Council without the introduction of HATs. But, like the Council, they recognise that HATs are likely to generate more resources for investment. 44

7 Central government as initiator: Housing Action Trusts Conclusion The evidence from the case studies presents different emphases in the responses of councils. Lambeth Council opposes the proposal; Sunderland Council does not. Tenant opinion, however, seems similar in both areas. Tenants were particularly hostile to the Government s initial decision to implement the policy without consulting them, and they share similar fears about security of tenure and rent levels. In both Lambeth and Sunderland the future of the Housing Action Trusts will turn on the results of the tenant ballots. In general, the Government s plan to introduce HATs does not appear so far to have achieved much success. 45