PolicyAnalysis: the Privatisation of Council Housing

The privatisation of councilhousing is intrinsically tied to the broader privatisation process of the1980's that, together with North Sea oil, constituted the basis of governmentfinancing under the Thatcher regime. However, it is important to note that privatisationwas, and remains, a political ideology every bit as much as an economic action.Privatisation is synonymous with Thatcherism and a pragmatic approach topolitics that is able to move away from rhetoric to embrace reality with easeand a certain degree of political effectiveness. The key, therefore, tounderstanding the current policy process with regards to the privatisation ofcouncil housing is to note the essential continuity between Thatcher's ToryParty and New Labour, particularly concerning domestic economic affairs. Whetherthe original policy was in fact designed to reduce the gap between rich andpoor (to liberate the poorest members of society from the urban post warpoverty trap) is a matter of sifting through government propaganda and is stillcertainly very much open to debate. State employees, for instance, would give awholly different answer to the media and independent watchdogs. However, forthe purposes of this essay, judgement is not required; instead analysis willfocus upon the evolution of the policy from the 1980's to the present day tosee how affordable rented accommodation is fast becoming a commodity ondiscount in the UK as quasiprivate landlords step into the vacuum created bythe erosion of the responsibilities of the municipal authorities.

First, a description and definitionof the policy must take place with a brief overview of the tools in place toensure the safe transition of property from state to private hands. Privatisationis a central governmental policy that requires local authorities to comply inthe selling of council property to private landlords. Yet the framework throughwhich social policy reforms were historically tackled changed irrevocably when thestructure of municipal government was fundamentally alerted during the 1980's,as Jones and Kavanagh (2003:226) explain.

In 1986 the metropolitan councilswere abolished by Margaret Thatcher, who considered them wasteful as well asLabour strongholds; their functions were distributed downwards to otherauthorities.

One of the ways in which Thatchersought to combat the traditional Labour stranglehold on the working classes wasto give council tenants the opportunity to purchase their council homes at areasonable price; the 'righttobuy' policy as it was known at the time. It wasa classic shortterm policy, the catalyst for an entire political culture that isstill very much rooted in political expediency because, while tenants took upthe option to buy their homes in their thousands, the problem shifted to thepart of the population who were dependent upon rented accommodation for shelter.The option to buy council property was not realistically an option for thoseunable to work, the elderly and indeed everyone mired in the welfare systemunable to earn a wage acceptable to government property price fixers. Anunderclass has thus been prevalent since the late 1980's that is dependent uponrented accommodation but, at the same time, is increasingly ostracised from themainstream of the UK housing market. The key point to bear in mind is theexpediency of the initial reform; one that was designed to keep the Tories inpower more than it was concerned with the plight of the poorest members ofBritish society.

More significantly, the state's adoptionof the policy of laissezfaire for the council housing issue telegraphed ageneral deregulation of housing services at the precise time when greater stateintervention was required. In this conceptual context, little has changed underNew Labour. The 1990's in fact saw an increase in the state's drift away fromregulation of council housing, assisting, in the process, the rise to power ofthe worst excesses of the industry. The legacy is that unscrupulous groups oflandlords now control the lowest end of the rented housing spectrum, hiking upprices and buying up many of the remaining council properties to ensure a kindof economic hegemony over former public owned properties. Furthermore, thediscernible lack of new buildings in the most deprived areas of the country hasadded an extra urgency to the problem, itself a direct legacy of the lack ofmoney put back into the council housing system under Thatcher. One can begin tosee the essentially constrictive effect of the initial policy of privatisationwhereby the shortcomings could be covered up in the short term but,simultaneously, the long term issues bequeathed by its advent would prove evenmore difficult to solve.

With the wide ranging problems ofthe privatisation of council housing policy exposed attention must be turned tothe measures taken by the government to counteract the increasing marginalisationof the weaker and poorer members of society. First, it should be rememberedthat although New Labour has indeed continued the path set out by Thatcher'sinitial privatisation policy, it has likewise overseen the greatest series ofsocial reforms since the end of the Second World War. Blair's first term kickstartedthe broader policy of 'social inclusion' that particularly targeted employmentby tackling training and the stigma surrounding being out of employment. Theissue of social exclusion, unemployment and housing was therefore central toGordon Brown's aim to get Britain back to work. Yet by trying to tackle so manydeepseated issues at once, New Labour had to sacrifice one area of its reformagenda for the sake of the others. In this way Blair failed in his bid to easethe burden of shelter for the poorest elements of society. By making morepeople eligible for Housing Benefit, New Labour has only succeeded in furtherconstricting the already taut state of the poorer end of the housing spectrumin the UK, as Hewitt concludes.

The stress on rewarding work in thegovernment's policy and rhetoric is in danger of overshadowing the needs of themost vulnerable who cannot work.

In addition, according to theRowntree foundation (Social Policy Research: June 1996), Labour's overrelianceon means tested methods of ascertaining housing benefit has resulted in asizeable increase in the number of claimants, putting added pressure on thelocal authorities that must deal with the discrepancy between supply anddemand. The government has since aimed to tackle the problem by shifting theonus onto local authorities who have been very quick to take up the option totransfer large numbers of homes to private associations. Matt Weaver (2000:3)projects that, because of this, there will not simply be a lack of councilhousing in the future, there will in fact be a vacuum where once there used toexist state funded accommodation.

Giventhe current level of interest, transfer will arguably have more impact than theConservatives' right-to-buy policy. Around 1.7 million council homes have beenbought under right-to-buy, but the figures are no longer rising steeply. Thenumber of homes transferred will soon overtake this number. And if it carrieson at this rate, there will be virtually no council housing left in 14 years.

The cumulative effect of the policyshould be clear: a widening of the gap between the rich and the poor in the UKas well as a restriction of opportunity for the poorest members off society tomove to a demographically healthier area. The reasons for the failure reside inthe expediency of the initial policy and the broader issue of the UK housingmarket which is fast spiralling out of control. Since the mid1990's, houseprices in Britain have soared above their European equivalents, igniting a risein prices across the housing spectrum, including the poorest areas of thecountry. The extent to which the Blair Government is responsible for this is amatter of conjecture and debates pertaining to possible solutions are equallydivisive. For the state to intervene now in the dynamics of the housing marketcould be catastrophic for long term economic growth; on the other hand, as TheGuardian has suggested, a continuation of the current policy may result inthe paradigm of council property being restricted to the annals of history - anextinct, discernibly twentieth century social phenomenon.

Certainly, New Labour oftendeflects attention away from housing to illuminate the perceived success withinother areas of welfare reform, such as schooling, the New Deal and the fundingof the NHS. It is precisely because it is part of the broader policy of welfarereform that housing often gets overlooked as an area in which the governmenthas failed in its policy of 'social inclusion.' In response, some regions inthe UK have had to look elsewhere to ease the economic hardship garnered by theeradication of affordable housing, urban degeneration and the dissolution ofindustrial employment. Two million people in the South Wales Valleys, forexample, are eligible for economic aid under Objective One of the EuropeanUnion's programme to alleviate poverty in the worst affected areas of Europe.The fact that locations within the UK are seeking funding from the EU has beencited as proof of the government's failure in the privatisation of councilhousing, though the blame in this instance resides in the politicalpolicy of devolution, which has hampered the intended reformist effects of the socialpolicy of privatisation. More significantly, this underlines the fundamentalfluidity between political, economic and cultural agendas of reform. Councilhousing has never been a solely social issue.

Conclusion

It has been shown that theprivatisation of council housing policy was, in the first place, a means toaccrue government funding as well as an example of political expediency. Thepolicy has failed primarily because of this insecure foothold from which itbegan. Whether the intention was ever for an improved standard of living forthe poorest members of society is highly debateable, and if the policy did infact aim to solve a particular problem of poor housing then its solution hasonly exacerbated the initial problem with greater numbers of displacedresidents and a shortage of low income level housing that verges on a domesticcrisis. The cumulative effect of twenty years of council housing policy in factresulted in a greater divide in the richpoor axis in Britain; hence theestablishment of independent bodies such as the Joseph Rowntree Foundation,dedicated to social policy research and urban redevelopment via public funding.

However, judgement must be reservedfor analysis within the broader context of welfare reform, which has the morehonourable intention of making twenty first century Britain a more socially inclusivesociety. Although, hitherto, the government has failed to deliver on this promise,the aims of the policy should not be overlooked, nor should the extent of theproblem of contemporary low income housing. Moreover, the shift into acceptingnonstate actors as key players within the broader state mechanism of welfare reformwill doubtlessly be seen as a common feature of social legislation henceforth. Putsimply, the Blair Government has had to include the private sector in housingreform in order to keep the paradigm of the welfare state alive, as Giddens (2002:79)observes.

Some forms and aspects oftraditional welfare systems need substantial change if they are to deliver thepublic goods citizens want. The state cannot provide public servicesefficiently and equitably without collaborating with nonstate agencies,including nonprofit organisations, third sector groups and private companies.

In the final analysis then, the factmust always be borne in mind that council housing was designed for a verydifferent country to the legislative monolith that constitutes Britain today. Theconcept of the state has therefore had to modernise to be able to meet thedemands of the reality of economic globalisation. The NHS, education andhousing will each incur further reforms as the government realigns the countryon a more global, contemporary footing and privatisation of council housingwill continue to be perceived as a failure for as long as it is examinedthrough a twentieth century lens.

BIBLIOGRAPHY

G.L. Bernstein, The Myth ofDecline: the Rise of Britain since 1945 (Pimlico; London, 2004)

D. Coates & P. Lawler (Edtd.), NewLabour in Power (Manchester University Press; Manchester, 2000)

A. Giddens, Where now for New Labour? (Polity Press;Cambridge, 2002)

R. Hefferman, New Labour and Thatcherism: Political Changein Britain (Macmillan; Basingstoke, 2000)

B. Jones & D. Kavanagh, BritishPolitics Today: Seventh Edition (Manchester University Press; Manchester,2003)

S. Ludlam & M.J. Smith (Edtd.), New Labour inGovernment (Macmillan; Basingstoke, 2000)

M. Powell (Edtd.), New Labour,New Welfare State?: the Third Way in British Social Policy(Policy;Bristol, 1999)

A. Seldon (Edtd.), The Blair Effect: The Blair Government,19972001 (Little, Brown & Co; London, 2001)

Selected Articles

M. Hewitt, New Labour and SocialSecurity, quoted in, M. Powell (Edtd.), New Labour, New Welfare State?:the Third Way in British Social Policy (Policy; Bristol, 1999)

Life on a Low Income:SocialPolicy Research Paper 97 (June 1996), quoted in, Joseph Rowntree FoundationWebsite; http://www.jrf.org.uk/knowledge/findings/socialpolicy/SP97.asp

M. Weaver, Going Fast: if theTransfer of Council Property's to Associations continues at Today's Rate therecould be none left in 14 years, quoted in, The Guardian: G2, SocietyGuardian (Wednesday 2 February 2000)