This is an email sent to Swindon Council Cabinet members in response to the proposal to charge “affordable rents” (that is, up to 80% of private market rents) for Council homes which are part of the ‘regeneration’ of Sussex Square.
Re Sussex Square and “affordable rent”
Dear Cabinet member
I am writing to you on behalf of Swindon Tenants Campaign Group re the above.
This Wednesday you have before you a document relating to the regeneration of Sussex Square in Walcot. The scheme involves the demolition of the existing 33 one and two bedroom flats and their replacement by what are ostensibly 34 Council homes; a mixture of houses and flats. However, the Council is proposing what would mark a significant departure from the principle of Council rents for Council homes and introducing “affordable rents”. What are these? The “affordable rent model” was introduced by the coalition government as part of its austerity programme. They made a 60% cut in funding of the previous government’s “affordable homes” programme, with a massive cut in subsidy for new ‘social homes’. Essentially the policy makes the tenants pay more by way of rents up to 80% of those in the private rental market, and the landlords, by increased borrowing. The subsidy element was reduced to £20,000 per home. Housing Associations or Councils had to accept this model if they applied for funding from the Homes and Communities Agency.
In the case of Sussex Square there is no HCA money involved so the Council is not obliged to introduce “affordable rent”. We are told it has to because it will only have sufficient money to proceed with the project if it does. We have no information to know whether this is the case or not. In discussion with the Council officer responsible for the scheme I was promised a break-down of the finances for both options – charging Council rents and charging “affordable rent”. However, this information has not been provided. The Cabinet document simply asserts that charging Council rents would render the scheme “unviable”. No evidence is provided whatsoever.
Even if the assertion is true (which remains to be seen), there is still a question of principle involved; that Council homes should have Council rents. There is a line here that should not be crossed. “Affordable rent” is unaffordable for many people and the Council officer has admitted that its probable that the only people who could afford the higher rent would be those on 100% housing benefit. That, of course, is part of the irrationality of the “affordable rent” model, which is driving up the housing benefit bill.
In the context of the deep housing crisis in Swindon it would be counter-productive to cut the housing stock we have at Council rents and replace them with “affordable rent”. Remember that these are not additional homes but replacements. It would decrease the number of genuinely affordable homes we have, in a situation where we have ever rising numbers on the housing waiting list. Introducing “affordable rent” for Sussex Square would set a dangerous precedent, which would be liable to be used again. We need more genuinely affordable housing for rent, not less.
The financial information provided to the Cabinet is, to say the least, sketchy. It says that there is “a shortfall in capital funding of£2.4 million” yet there is no indication of how much borrowing would be necessary and what interest payments would be. It would indeed be irresponsible for Councillors to give the go ahead for this scheme on the basis of the information provided. Furthermore, the document appears to give carte-blanche for further amendment of the scheme. Initially it was planned that the homes built would include 15 houses for sale on the private housing market. This has already been amended to 17 and the Cabinet document says;
“However, the scheme will change as it progresses through the planning system and the final number of dwellings, tenure type, sizes and layouts may differ.”
So the number of Council properties could move even lower.
Swindon Tenants Campaign Group the Council pointed out that tenants who wanted to stay in the area and move into one of the new homes might not be able to afford the higher rent. The concession was made that such tenants would be be charged a ‘social rent’ (i.e. not the “affordable rent”).However, this would be on a personal basis, so that as soon as the tenant left or died, then an “affordable rent” would be charged to the new tenant.
To agree to “affordable rent” on a pragmatic basis, without considering the consequences for housing policy in the town would be a serious mistake. This question needs to be considered in the context of the development of national housing policy. The “affordable rent” programme has been paid for by conversion of existing ‘social housing’ to “affordable” rent. To take the example of London, there have been 3,000 “affordable rent” homes introduced. However, only 543 of these have been new build. The rest have been ‘social homes’ converted into “affordable rent”. So the consequence of this policy is the loss of ‘social housing’. For every new home built nearly 5 ‘social rent’ homes have been lost in London and the number of tenants in receipt of housing benefit has increased as compared to ‘social housing’.
The government has recently announced a new round for”affordable housing” after 2015. Speaking at the CIH conference recently Housing Minister Mark Prisk announced that in the second round landlords would not only have to partly fund the new building by conversion of social homes to”affordable rent” but they would also have to sell off some voids. In other words more social homes will be lost, worsening the housing crisis instead of tackling what MP Robert Buckland has rightly called an “acute social housing shortage”.
With this in mind it’s even more important to maintain the principle of Council rents for Council homes; that is genuinely affordable rents rather than the bogus “affordable rent model” which will only make the housing crisis worse. The effect of the Sussex Square regeneration, as proposed, will mean that the Council will lose 30 or more Council rent homes.
We are opposed to “affordable rent” in principle since its introduction will worsen the housing crisis rather than tackling it. In addition we think it would be a mistake to make a decision on the basis of the insufficient financial breakdown which the document before you provides.
Secretary, Swindon Tenants Campaign Group
22nd July 2013