• Lib Dems break election pledge by agreeing to sell off council homes
• Executive £700 million short of bringing homes up to promised standard
• Lib Dems ‘stumped’ and waiting for government bailout

Southwark’s Lib Dem/Tory administration will sell off council homes to try to plug a £700 million black hole in the council's housing budget according to reports in the local press. The Lib Dems had promised to improve council housing, even going further than the government’s Decent Homes Standard, without ‘selling off our housing stock’.

In January 2008 Labour councillors called on the coalition to set up a cross-party group to solve the growing Decent Homes funding problem, but that call was knocked back. Since then the estimated funding gap has increased by £400 million.

Even the Lib Dems’ proposed council housing sell-offs will not entirely plug the funding gap, however. It would take almost 25 years for the council to raise the £700 million it needs at the rate the administration has proposed. The only further substantive cash-raising scheme in the strategy is to look for a bailout from the government, City Hall or another agency.

Southwark Labour’s Housing spokesman, Cllr Ian Wingfield said:

“The Lib Dems failed to grasp the nettle with Decent Homes a couple of years ago and now it’s grown into a problem of truly staggering proportions. £700 million is over £14,000 required from every single council household in this borough. Does every Southwark tenant have £14,000 to spare? I think not.

“I’m confident that if the Lib Dems had faced up to the problem earlier, they wouldn’t have to rip up their promises by selling off council houses now. But even with their ill-gotten gains the Lib Dems are stumped.

“The money they hope to raise won’t even begin to fill the vast hole in the budget. Beyond going to government with a begging bowl they have no idea how they are going to do that short of selling-off more public assets.”

Southwark Labour’s Leader, Cllr Peter John said:

“The shear scale of this problem is almost unimagineable, but we cannot forget that it has very real implications for thousands of tenants across this borough. This Lib Dem administration’s failure to improve council housing means that many tenants live in homes which are cold in the winter, with ceiling or windows that leak and with decrepit toilets and creaking ovens.”

1. The Government’s Decent Homes Standard is a minimum standard for all social and council housing in the country to meet by 2010. The standard requires that all homes are “warm, weatherproof and have reasonably modern facilities”.

2. In 2006 the Lib Dem administration pledged to go beyond the government’s bare minimum Decent Homes Standard by delivering a specifically Southwark initiative called Decent Homes Plus. This has now been renamed as Southwark Decent Homes and is supposed to meet ‘tenant’s aspirations’. The local media has reported that the council now estimates that it will cost £700 million to deliver their own standard.

3. In January 2008 the cost of meeting the council’s standard was estimated at a maximum of £300 million. The Labour Group proposed a motion to council assembly calling on the Executive to set up a cross-party working group with tenants and leaseholder representatives to find a solution to what Cllr Paul Bates, then Southwark Labour’s housing spokesman, described as “the biggest financial problem facing this council”. The motion was voted down unanimously by the Lib Dems and Tories.

4. The Executive is now proposing sales of up to 100 housing units a year to plug the funding gap combined with other asset sales from within the Housing Revenue Account of “underutilised non-housing assets”. The report is intentionally vague about what those assets are and what counts as being ‘underutilised’. The revenue from those joint sales is projected as roughly £30 million a year (£29M in 2009/10, £21.7M in 10/11, £35.7M in 11/12, £36.1 in 12/13, £43M in 13/14, £12M in 14/15, £10M in 15/16). It would take almost 25 years to raise £700 million with an income of £30 million a year

5. In the Lib Dems 2006 manifesto they promised to meet “the Government’s ‘Decent Homes’ standard without having to sell off our housing stock”

6. Beyond selling off council housing and other ‘non-housing assets’, the Executive’s only substantive proposals for how to fill the funding gap are to:

6.  
   • Make bids with the Homes and Communities Agency
   • Lobby the Government and City Hall
   • Efficiency Savings