WHY SOCIALISTS SHOULD OPPOSE GLASGOW'S HOUSING STOCK TRANSFER PROPOSAL

Today Scotland faces a huge housing crisis. Local authorities have an estimated housing debt of £3.5bn that swallows up the bulk of its rental income. An estimated £10bn of investment is required to put it right.

The present New Labour administration have made it abundantly clear that there will be no more new money for housing that is capable of tackling the scale of the housing problem That's why the Scottish Executive are proposing that Glasgow City Council transfer the whole of its council housing stock over to a "not for profit" housing association (Glasgow Housing Association). In return they will service the councils huge housing debt and assist in securing £1.2 to £1.6bn worth of investment to tackle Glasgowís housing crisis. This article attempts to highlight the conscious destruction of public sector housing by both the Tories and now by the present New Labour administration. And why we should oppose this transfer.

The proposal for Glasgow is to be extended to six other Scottish councils. Aberdeen, Borders, Dumfries and Galloway, and three Island councils. Stock transfer is not new, and whilst it has been opposed in the past by socialists and tenant activists, there has been the need in more recent times to take a more flexible position towards it due to the housing conditions that working class people and their families face. In some corners there are even those comrades who genuinely feel that due to the poor condition of council housing, and the general state of local authority services, stock transfer is not such a bad option given the general control that tenants would have in influencing the day to day running of a housing association.

Hopefully in this course of this article we can identify that the proposal for Glasgow is unlike other transfers and would represent a backward step for public sector housing and tenants alike. In 1947 Britain embarked on the biggest council house building programme ever. Hundreds of thousands of council houses were built with new housing estates and new towns springing up everywhere.

And yet today with the so-called new prosperity that has supposedly unleashed itself under New Labour we are facing new record levels of homelessness with public sector housing grinding to a halt as a result of chronic under funding

Under Blair and New Labour the crisis has deepened even further with 55% less investment in housing expenditure than under the previous Tory administration.

In relation to council housing the main strategy of Thatcher was to slash local authority expenditure, promote the sale of council houses and the right to buy, and later on the transfer of public sector housing over to new Social Landlords (Stock Transfer). These measures have now taken their toll with catastrophic consequences on public sector housing provision. In 1979 63% of all households (over 1 million houses) in Scotland where in the public sector with 27% in the private. Today we have turned full circle with 63% of all households in the private sector and just 25% in the public (560,000)

Since the mid 1980s more than 400,000 council houses have been bought up through the right to buy, in conjunction with tens of thousands of houses that have opted to be transferred over to new housing associations to secure funding for modernisation. One small consolation to Scottish local authorities was that they were allowed to retain 100% of their capital receipts from council house sales to reinvest in housing. This was reduced to just 25% by Michael Forsyth in 1997 just before the Tories where annihilated at the general election a policy that was condemned by Labour at the time but not changed when they came to power.

These measures were to have a dramatic effect on councilís ability to provide good quality council housing. The right to buy and continued under funding put great pressure on councils to spend more on repaying the housing debt with less on repairs and improvements which led to an even greater demand for the right to buy and for tenants to consider the option of stock transfer to secure improvements. Labour In Opposition Throughout their opposition years Labour initially opposed the Tory onslaught. Opposing cutbacks in finance, the sale of council houses and even the concept of stock transfer. In the 1983 election manifesto there was a commitment to restore the cutbacks that had taken place under Thatcher.

Even in local authority elections Labour councils committed themselves to rent freezes and no cooperation with setting rate levels in order to address the cutbacks. But with re-election of Thatcher the Falklands victory behind her, the defeat of the heroic Miners strike, the need for a rethink and new realism was to become a by product of the leadership of the Labour Movement.

In this period alone only one Local authority stood defiantly against Thatcher. Liverpool City Council with a Marxist leadership won concessions for the working class of the city by building new homes and expanding services. They were eventually removed from office by a Tory appointed district auditor and the courts. With the majority subsequently expelled from the Labour Party.

After a third and fourth general election victory by the Tories the origins of New Labour were set in train preparing the theoretical basis, as we know it today.

Wendy Alexander launched the Better Homes Stronger Communities a proposal for Glasgowís stock transfer and a fanfare of publicity followed. It gave the impression that this was an innovative idea. Glasgowís housing crisis would be tackled once and for all. The pages of the media were covered with previous examples of stock transfers showing dilapidated tenements being turned into nice semi-detached houses with back and front doors, gardens, double glaze windows and central heating, a complete transformation had taken place. There is no disputing the fact that stock transfers have been successful leading to huge improvements in the living conditions for thousands of families. However most transfers have been small scale making it more manageable with substantial sums of money made available for investment. This is not the case for Glasgow.

Should Socialists Oppose The Stock Transfer Of Public Sector Housing?

In the late 80s early 90s there was a determined opposition to stock transfers that gathered apace. This was due to the establishment of Scottish Homes a Tory quango. Money was rerouted from local authorities by central government in order to allow Scottish Homes to fund the transfer of public sector housing over to new Housing Associations. The transfer was also made a lot more attractive as the majority of the investment was provided in grant form (Housing Association Grant) from Scottish Homes to the new Housing Association. Grants would cover 90%-95% of the investment package with only a small percentage coming from the private sector. The reason for opposition to this development was that the money channelled into Scottish Homes was at the expense of funding for public sector housing to local authorities throughout Scotland. For every £1million given to Scottish Homes signalled a cut of £1million for public sector housing provision.

However added to this, was new legislation that came in to give Scottish Homes legislative powers to oversee these transfers as well as changes in tenure from secure to assured tenancy giving the landlord and the funders more power of eviction and control over the tenants particularly in relation to rent levels. The decline of Scotlandís public sector housing renders it almost impossible to stand against stock transfer in most cases as slum conditions continues to grow.

However what is being proposed for Glasgow, and in all likliehood other local authorities, is unlike other transfers to date, for a variety of reasons. It is quite clearly a statement of intention by New Labour to abandon any commitment to the provision of public sector housing not just in Glasgow but throughout Scotland for now and the foreseeable future.

In the first instance it means the end of municipal housing in Glasgow, as we know it. It will have major consequences for homeless provision as Glasgow will retain its short term stay hostels and will still be responsible by law for the homeless but they will have no houses. There are more than 5,000 workers who are employed by Housing Services and the DLO whose employment will be threatened long term regardless of assurances. The City Council's Building Services is the single biggest employer of construction apprentices in Scotland.

The Glasgow transfer will not be capable of providing a complete refurbishment/renovation for those that require it. It will be incapable of building new houses on any large scale even after demolition as other transfers have done and are doing at present. The investment proposal is estimated at £1.2bn to £1.6bn with over £200 million being lost to VAT receipts. Glasgow has a present housing stock of 97,000 houses. If we even take the estimate that 60% (58,200) of Glasgowís houses require double-glazing then we can confidently predict that this is the number of houses that will require major investment. It amounts to £20,618 per unit for these houses, this figure excludes investment that would be required for other households in Glasgow that have double-glazing but do not have central heating and so on. And yet when we listen to those who hail this proposal for Glasgow as an answer to all of its housing problems, that every one will have a home fit to live in, then how can they possibly mean this when we compare other transfers where the standard investment is between £50-£70,000 a house allowing for a complete renovation of the former house or demolishing it and building a new one.

The investment package for Glasgowís housing stock will not transform its housing situation to the extent that tenants are being led to believe. Nonetheless £1.2bn of investment can have an impact, it should provide every house with double glazing, central heating and possibly a new bathroom suite but it will not lead to the building of 1,000s of brand new homes or for that matter the renovation of all of its housing stock that requires it.

The main funders will be private, unlike other transfers where the bulk of the funding has come through the Housing Association Grant from Scottish Homes which ironically is from the public purse as this money comes from central government. In the case of Glasgow there will be no additional grant aid. All revenues raised will be from private finance based on the new organisations' rental stream. Which in effect will mean a new debt having to be negotiated with the funders.

Although this point has been well documented by opponents of the transfer it is the case that the funders will be the pivotal players in determining rent levels, and where and how the investment is likely to be spent, regardless of the views of the tenants.

Another difference, which is of critical importance, is that the whole of Glasgowís housing stock is proposed to be transferred, removing local and central government responsibility and accountability to the cities housing needs. Future investment for its long term needs will belong with private finance. The Scottish executive call this community ownership. At no stage will the tenants of Glasgow come anywhere near to owning or controlling their housing stock. The houses that they live in will be an asset for private finance to secure profits.

On the 27th April Wendy Alexander informed the Scottish parliament that £1.6bn had been made available for this proposal. To date there is no details of the arrangements to secure the funding nor the package of repayment to the funders. This in itself could seal the fate of the proposal as the demands from the funders could make it impossible to realise affordable rent levels that are guaranteed to be stable-as has been promised.

However the main reasons for our opposition is that the transfer proposal is unnecessary and that we are opposed to the abandonment of municipal housing which the proposal aims to do. Tommy Sheridan MSP and local councillor for Pollok has consistently argued that Glasgowís housing debt should have been cancelled years ago when tenants were paying 60p for every pound paid in rent to the city sharks to service Glasgowís housing debt. If the debt was cancelled tomorrow it would release £124 million per year from rents to invest, repair and upgrade the present housing stock without having to borrow a single penny or increase rents. This would also be achieved within the same timescale of approximately 6-10 years. It would also provide job security for the present staff and future employment should guarantee trade union rates of pay and conditions for new staff, with an increase in apprenticeships.

So why is New Labour opposed to such an option? The main reason is that the money spent on public sector housing by Glasgow City Council, even though it is not borrowed or provided by central government, would still be included under the Public Sector Borrowing Requirement (PSBR) Treasury rules. It is a clear-cut ideologically driven proposal by New Labour to keep down public expenditure levels and spending.

The initial timescale for the ballot for Glasgowís tenants was to be November 2000, this has now been postponed until May 2001. It indicates the difficulty that the steering group has had which was set up by Wendy Alexander in putting a package together. To date there has been no euphoric reaction from the tenants of Glasgow in response to the misinformation that has been used in the press to sell this proposal, although that is not guaranteed to last forever.

It is imperative that a tenant led campaign in conjunction with local authority trade unions campaigns for a no vote. It should not demand that we stay with the status quo. We have to call for the cancellation of Glasgowís housing debt in order to free up its rental income to pay for the necessary improvements to eradicate the intolerable housing conditions faced by thousands of its tennents. Council housing was introduced to provide workers and their families with affordable good quality housing and to bring to an end the conditions of slum housing. We must to fight ensure that that option is made available for the present and future generations.