Is Labour’s housing policy and council house funding plans simply Tory v2.0?

The arrival of a new government has today seen changes announced to the planning system today with the intention of increasing housebuilding.

Much makes a lot of sense such as building around railway stations to prevent sprawl on the edges of towns. Back too comes housing targets but there’s also some worrying sounds.

Labour’s new chancellor Rachel Reeves has stated government will not increase funding for new social and council homes despite a vast increase in numbers now classified as homeless as well as long waiting lists nationwide. She stated the private sector would build and “We’re not going to be in the business of building those homes directly”.

That was expected as the party manifesto made clear they’d stick with Tory funding plans for affordable housing; Funding that has proved woefully insufficient and seen even more people housed in temporary housing or private rentals at vast cost to the taxpayers.

Greenwich Council have been paying Travelodge millions for temporary “housing”

The Labour manifesto stated they would “make changes to the Affordable Homes Programme to ensure that it delivers more homes from existing funding”. Yep, that old politician’s trick of stating they’ll do more with existing funds. It almost never works – and won’t given the scale of problems now seen.

Right on que this week we see yet another example of where that has led us with a substantial cost overrun being reported in Lewisham borough as contained in a report before the council’s Cabinet and Mayor. Pick a borough just about anywhere and it’s a similar story.

Numbers and costs keep rising. Earlier this year Shelter stated homeless numbers in the UK is up 14 per cent to 309,000. Rough sleeping is up 27 per cent.

Billions of pounds are now heading towards owners of B&Bs and temporary housing as well as private landlords owing to a shortage of social homes. Greenwich Council have seen numbers in temporary housing rise from 443 in 2015/16 to around 2,000 in 2024.

Increases in recent years. Now around 2,000

Hotels are being utilised at vast costs and families are being moved hundreds of miles away from existing employment, schools and family.

In autumn 2023 Greenwich Council revealed £800,000 a month spend on Travelodge’s alone and homeless households were up 13.5 per cent on the year.

Accounting changes

Boroughs are trying to rejig numbers and shift some of the costs from local town halls to Westminster but it doesn’t impact ultimate costs. Instead it merely changes from impacting local councils to national funding.

Yet we have Chancellor Rachel Reeves constantly raising “fiscal rules” in order to maintain Conservative funding plans – while long term it costs more through public money heading to landlords and providers of temporary housing.

Research in 2023 showed that government would spend “five times more (£58.2bn) on subsidising private landlords via housing support than on its entire affordable housebuilding programme (£11.5bn for the Affordable Homes Programme) over the next four years”.

If the new government’s planning reforms do increase overall homes it’s still extremely unlikely that will solve the problem of truly affordable housing demand. It never has before.

And it takes years to achieve while number of people in housing trouble and ensuing costs is rising exponentially now.

Local politics meets national

This has a local resonance too as Woolwich and Greenwich MP Matt Pennycook is now Housing Minister. He must surely know how many problems a lack of social housing causes local families, local council finances and how numbers are vastly increasing.

If this government will maintain Tory budgets on new affordable housing then the only real alternative (though far from enough) is trying to secure homes for those on the social housing waiting list via private development. Yet even here Pennycook has opposed on substantial developments in his constituency.

London Affordable Rent levels at Morden Wharf for those on social housing list. The 35 per cent equals 300 homes.

The contentious Morden Wharf development was approved with 300 homes for those on the social housing waiting list. Pennycook opposed. Fair enough on some points you may think, but he then claimed rents for those on the waiting list at London Affordable Rent tenure was “intermediate” in contrast to what Labour councils and a Labour Mayor have stated.

It is higher than traditional social rent at 50 per cent market rate compared to around 40 per cent in the last, but then Labour aren’t committing to ensuring that 40 per cent rent rate is set in stone. And if they did it would take more cash and Reeves remember doesn’t want to increase funding.

No to this and no to that

So what’s it to be for Labour? No extra funding beyond Tory levels for public housing while also opposing developments providing hundreds of homes for those on the waiting list – while opposing a rent tenure with no plans to change what that tenure is? It’s a recipe for doing little and ever more problems.

The tired old line that the UK cannot afford it is a nonsense. This country built far more homes in 1950s austerity and in the 1970s when the IMF had to support the nation. It can be done – and it can help millions while ensuring billions isn’t flowing to private landlords.

Reeves today has in effect said what Labour councils such as Greenwich are doing in directly building council homes is wrong – but they are at the forefront of seeing what happens when they aren’t built.

In the past few years the GLA and boroughs like Greenwich have built up capability through plans such as Greenwich Builds. I could reel off many publicly owned sites that could get moving quickly in London if funding was made available.

Rachel Reeves though is refusing to do it. We’ll all pay the price.

 

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J Smith

I've lived in south east London most of my life growing up in Greenwich borough and working in the area for many years. The site has contributors on occasion and we cover many different topics. Living and working in the area offers an insight into what is happening locally.

    12 thoughts on “Is Labour’s housing policy and council house funding plans simply Tory v2.0?

    • At best they seem like New Labour again which no one wants.

      How many landlords among new MPs and how much in donations to Labour from businesses that benefit from few social homes? Got to be looked into. We expect it from Tories but Labour seem oh so similar on this issue.

      Reply
      • It is aright building the new homes but we need the new infrastructure put in place as well. Including improving sewage and drainage to cope with the Increased demand from the new homes.
        Improvements to public transport including rail and bus services. Improvements to
        roads. New GP Surgeries, Dentist, Schools, Nursery Places and shops for the new residents moving in to newvdevelopments.

        Reply
    • Labour councils’ poor housing oversight is precisely why the party did not get my vote. Housing and planning policies need wholesale reform that Labour is simply not up to the job of doing.

      Reply
    • Let me guess all those Labour folk who complained about the Tories on social housing failure are now silent?

      Showing truue colours if they are. All about power and once that’s attained no care for those in need.

      Reply
    • I have to say, I think a few of the comments here (including the original post) have been quite quick to judge.

      Today’s announcements show that Labour are determined to move on housing and planning. Scrapping the ban on on-shore wind on day 4 of a government shows that they’re keen to get moving and will tackle vested interests.

      And whilst I share the frustrations listed here that council / social house building won’t move ahead very quickly, I hardly think it’s surprising given the overall financial messaging in the run up to the election. Does debt / deficit mean anything material at the scale of national government? In reality probably not. But it is (unfortunately) incredibly important in terms of political messaging. Saying anything else would have made Labour unelectable. Again.

      So I think we need to give them a little time to deliver on their programme. And that programme requires increased tax receipts through growth to pay for investment. Which probably needs more than four days…

      Reply
      • The affordable housing budget as it stands is chicken feed in terms of governmental spending. It could be doubled and still be a rounding error but show intent.

        That the manifesto ruled it out and Reeves statement today was still dismissive tells us much. They are content for more billions to flow to private landlords – which won’t help the country’s finances and has the disbenefit of no public assets after such spending or employment an affordable housing programme provides during construction.

        Reply
        • I’d also say we don’t really have time. See the exponential growth of homeless households currently.

          Labour’s planning reform appears positive but will probably be bogged down. Plenty of NIMBYs in opposing parties and within Labour.

          Meanwhile shovel ready public housing schemes already approved languish.

          Reply
          • I don’t disagree that these are important things. But surely you can see that if you add enough chicken feed up it quickly becomes unsustainable within the fiscal envelope it was necessary to commit to in order to convince people that that labour had moved on from ‘tax and spend’?

            I say this as someone who strongly believes in tax and spend, but had reached their absolute limit at the short termism and national self-hate exhibited over the last 14 years.

            Reply
    • Reeves has always struck me as a very orthodox Treasury/Bank of England type (she did work there after-all) who is all about boosting the cost of homes with little regard for affordability and resulting social impact. A tory lite. There may be a sprinkling of funds for those at the very edge with housing but protecting certain interests is the key aim.
      I get a certain Labour caution pre-election but she seems to be all but ruling out anything now and in future after they’ve won by saying today “We’re not going to be in the business of building those homes [council homes] directly” and repeating the failure of the past in attempting to increase numbers sufficiently via private development. When has that ever worked on a scale needed? She’s not even offering hope for the future. Same old tired mantras which have failed. Failed socially. Failed economically. Waiting for tax increases to rise to fund new homes is another way of saying we won’t do anything like what’s needed for many years if at all. We will however protect private interests such as the private rental sector and landlords who reap the taxpayer rewards today, tomorrow and into the future. Always cash for that. Always cash for that under Treasury and BoE policy which Reeves has embraced all too happily.

      Reply
    • Maybe a bit rash with this piece given it’s week one? Though I concede the wording of the Chancellor wasn’t great and hopefully she misspoke.

      If there’s not much policy change as well as increased funding at the next budget then I agree serious questions need asking of Reeves. Housing and its impact is one of the big issues of the day. We can’t continue as we have.

      Reply
    • To be fair Labour Councils have some of the worst social housing homes in various states of disrepai needing urgent remedial works which are not always forthcoming.
      That said Michael Gove when in Government gave Councils money to retro fit their older council homes at streer level to make them more energy efficient and to reduce carbon emissions. This work is currently being undertaken by Wates where certain homes have been identified as needing the works in stage one of the project.
      We need to wait for the budger to see what money and targets Rachel Reeves sets for housing in her first budget as Chancellor
      Bearing in mind mlions of pounds of public money have already been wasted by Labour cancelling the Rawanda Scheme.
      Tories did not meet their housing targets either for new homes to be built.
      I believe Labour want to create new towns outside of London which could work well.

      Reply
    • It is aright building the new homes but we need the new infrastructure put in place as well. Including improving sewage and drainage to cope with the Increased demand from the new homes.
      Improvements to public transport including rail and bus services. Improvements to
      roads. New GP Surgeries, Dentist, Schools, Nursery Places and shops for the new residents moving in to new developments.

      Reply

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