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'Most expensive' council homes go under the hammer

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Sunday 3 November 2013 9.05pm
You want to abolish council housing because you saw some posh cars parked on an estate? I suggest you don't ever go into the city, the show of wealth you see there will make you want to abolish Britain.

The subsidy described by Cllr McNally is money the government put into council housing as a one off to meet decent homes standard. Council housing is not subsidised, the money Southwark and other councils spend on their properties comes from the rents and service charges.
Sunday 3 November 2013 9.31pm
I agree with Zoe that the politics of envy is not one I would ever want us to engage in - if someone has a nice car that should not prevent them from living in a council home. I was born in a council home and I have lived in a variety of tenures ever since.

But equally I would not want people to think that the amount that is spent on council housing is solely paid for by tenants rents and leaseholder service charges - that would not be either correct nor accurate.

Council housing finance is complex - like all local government finance - when I was responsible for the money from 2008 to 2010 it took me a long while to get my head around the differences between local government finance and the commercial and charity finance regimes my professional life had made me accustomed to.

The old system involved the council collecting rents and service charges - bundling it up, sending it off to central government and then getting back money which - calculated using arcane formulae ment that most years lucky as we were - was more than we collected. As such we received subsidy from central government for Southwark's housing.

Major investments such as the fire safety and decent homes monies were one-off investments as Zoe notes, but she perhaps did not know that Southwark was usually a beneficiary of the old housing finance regime, ie that actually we were being subsidised.

Once again I say that receiving a subsidy for social housing in Southwark is a very good thing - it's one I wish to see continued, but many posts on this item have not been completely correct in respect of the facts and I hope that I can help everyone understand the true position.

In its purest form social housing would be "at cost" housing. In Southwark this is not the case and we have many decades of under-investment to catch up with before this could be the case.

But the main point, don't be jealous or blame those living in social housing - let's work together to ensure that anyone can access housing that's affordable to them - it can never be right that over 50% of someone's income goes to pay their housing costs before they can consider food and other essential items. Housing costs in SE1 and SE16 are crazy - sometimes only social housing makes us think what is normal in 90% of this country.

I have had major arguments with national politicians about the overheated housing sector here - I once told a Minister he was a fool - because supply and demand economics are causing a bubble here that is not sustainable on so many levels.

Living here in Southwark is great. I love it and so I am sure do most residents. If we can provide an answer to housing supply then we will have cracked it.


Cllr Tim McNally
LibDem Member for Chaucer Ward
07903 967 809 / 020 7525 7157

[Executive/Cabinet Member for Finance 2008-2010]
Sunday 3 November 2013 10.13pm
What Cllr McNally said!

I agree that HRA is really complex, however it's an important point that no additional government funding was being provided to council housing, all of the money came from rents. The government took all council house rents centrally and then some guy in central government shared it out, rather randomly it appeared to everyone else (I'm sure it involved a complex Excel sheet).

Southwark was effectively being subsidised by other council tenants (rightly or wrongly, that's what happened!). Now councils keep their own money, which is good for some councils and bad for others. I don't know if this is good or bad for Southwark but there is some pretty poor housing, which is bound to be expensive to maintain, so I suspect it's bad for us (do you know Cllr McNally?).

I think some people imagine councils receive government money for housing, or take it from council tax. It does seem unlikely that an organisation could provide so much housing with such cheap rents without a subsidy, but this is actually because most of us have only known a housing market that is a big bubble, which leads to ridiculous rents.

Building new council housing will bring extra rent into Southwark. The housing should be cheap to maintain as it's new, and the extra rent can be used to bring the more rubbish housing up to standard. It seems a win win situation, and will help provide realistically priced housing for thousands of families. Definitely smiley face!
Sunday 3 November 2013 10.25pm
Floodplain wrote:
This weekend I passed an SE1 Southwark Council Estate with two cars parked with Estate parking permits - one a brand new luxury Porsche Cayenne 4x4 - the other an new high-performance Audi TT Coupe.

Please try to understand how angry this makes working taxpayers who are not lucky enough to qualify for the privilege of Council Housing which they are subsidising.

Posted on a thread where people have pointed out that coucil tenants have often used their right to buy then sold the flat.
Sunday 3 November 2013 10.40pm
boroughonian wrote:
James,I/we have had this argument over the meaning of the word subsidy,i'm happy with my position on this.

Ok, there's no point retreading old ground. I won't say any more except to point out you're are ignoring opportunity costs and therefore arguing not just against me but also the definitions of subsidies central to mainstream economic theory.

Personally, like Councillor McNally, I'm happy to argue the moral case for subsiding housing and see no need to deny that there are subsidies.
Monday 4 November 2013 9.11am
Floodplain wrote:
This weekend I passed an SE1 Southwark Council Estate with two cars parked with Estate parking permits - one a brand new luxury Porsche Cayenne 4x4 - the other an new high-performance Audi TT Coupe.

Don't judge a book by its cover. The Arnold Estate is similarly full of high-end motors, especially during the week, but don't be fooled; these aren't residents' vehicles. No, these are mostly the cars of people working at 160 Tooley Street and people working in the vicinity who have managed to get their hands on permits.
Monday 4 November 2013 5.23pm

So when did I state that I wanted to 'abolish council housing'?

I see them as a precious resource, which is why I want to see more working people live there.

If you value Council Housing, then you should be concerned about the widespread abuses in London, such as:

- people obtaining parking permits for estates where they don't live

- illegal tenancies where flats are sub-let, sometimes by professional criminal gangs

- more commonly, Council Tenants taking on lodgers and not declaring this for their Council Tax Benefit and Housing Benefit.

I'd like to see systematic door-to-door checks by Southwark to ensure that the bona-fide tenants are in fact living in each flat.

This would be a way to quickly release Council flats to homeless families.

I would however certainly like to abolish cars in Central London, especially 4x4 ones, but that's another debate.
Thursday 5 December 2013 7.18pm
Interesting extract from today's Autumn Statement which may have implications for areas such as SE1:

''take further action to increase housing supply and support home ownership by funding infrastructure to unlock large housing sites; and by increasing the funding available for new affordable homes by raising local authority Housing Revenue Account borrowing limits, allocated on a competitive basis, and from the sale of vacant high-value social housing''

(Page 8 - document can be downloaded at:

The key word highlighted in bold is 'vacant' - but in my assessment, there is a very compelling argument that sale of high-value council housing located in premium areas such as SE1 is entirely justifiable in order to release funding to build many, many more Council Housing units in lower-rent postcodes such as SE15 etc.
Thursday 5 December 2013 11.11pm
Floodplain, I have lived in a council flat for 30 years in such an area; my flat was empty for 6 months before I moved in because it was on the top floor, and not in a particularly popular area. And now the area has become popular with premium rents. So, what you are saying is that I don't deserve to live here any more because I don't pay enough rent. Worse, you would have me re-homed miles away so that the council can sell the property to developers who will build a similar block of flats and charge the Earth. Why can't I live in this area of SE1? Why should I move out to let someone with more money than me move in? And how am I going to afford to commute to my job in the city when I am on minimum wage?
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