The Tory plan to extend right-to-buy to housing associations combines Thatcherite economics and Soviet-style confiscation

Helping people to own their own home! Well, a few people. At least a couple. For definite. Image: Getty.

Here we go again. For months – years – I've been noisily arguing that the thing we most need to do if we're going to end the housing crisis, the single non-negotiable element of any solution, is to build more bloody houses.

Yet here comes the Tory manifesto, with its headline pledge to privatise more of what little social housing we still have left. You know, in my darker moments, I sometimes think that nobody in the upper echelons of the Conservative party is listening to me at all.

The plan would see England's 1.3m housing association tenants given the right to buy their own home on a similar basis as council tenants, at an enormous discount (up to £103,900 in London, up to £77,900 elsewhere). If you happen to be one of those tenants then this is obviously fantastic news.

But it's a terrible policy nonetheless. For one thing, housing associations (HAs) are charities, and while the government could force them to sell their homes at a discount, it still amounts to privatising stuff the state doesn't own in the first place. This policy is a bizarre combination of Thatcherite economics and Soviet-style confiscation.


For another thing, HAs as a class are probably the bodies most enthusiastic about the idea of building large numbers of new properties. It is not exactly clear how forcing them to sell their existing homes at a hefty discount will make this more likely to happen.

The Tories claim this won’t be a problem, because they have a plan to fund the gap: it involves selling off council homes in expensive areas, when they become vacant. Three thoughts about this present themselves:

1)   We’re losing two social homes for every right-to-buy tenant, not one, so that’s just great;

2)   Waiting lists, already long, will become visible from space;

3)   Social housing in expensive areas will, over time, cease to exist altogether, so the policy comes with a side order of social cleansing, too.

Just to be clear: this idea is awful.

So, it’s a bad policy. But what of the politics?

Those 1.3m HA tenants will probably be quite pleased with their free bung (most of us would be if the government chucked us £100,000). The Tories’ thinking is presumably that enough of them live in marginal constituencies for it to help swing a few seats.

But HA tenants are actually pretty well housed already: their rents are low, their rights are secure.

Another, rather larger, group suffers from high rents and no rights whatsoever. There are an estimated 10m people in private rented sector, and perhaps another couple of million young people living at home with their parents. The Tories have steadfastly refused to do anything for them. They’re not doing anything (longer tenancies, rent control) that might make renting a less soul-sucking experience. And they’re absolutely not planning to build enough houses to meet pent-up demand.

In other words there are roughly 1.3m voters who'll benefit from this bung, but perhaps ten times that number who are going to be understandably miffed that they’re not getting it.

These people, if they are rational economic actors, will desert the Tory party en masse.

The whole thing speaks of a kamikaze short termism at work in the Conservative party. Homeowners are disproportionately likely to vote Tory: that was the insight that led to the creation of right to buy in the first place, and whatever else that policy got wrong, that political instinct was sound.

And yet the party is doing none of the things it needs to do if it actually wants to arrest the long-term decline in the number of homeowners in Britain. It isn't making housing more affordable. It isn't making sure there's enough to go round. It's simply flinging a few crumbs down from the table, in the hope it'll win them just enough votes to keep Ed Miliband out of Downing Street.

It might work in 2015. But what happens in, say, 2025, when policies such as this mean that less than half the electorate owns their own home? How strong will the natural party of government be then, do you think?

 
 
 
 

As EU funding is lost, “levelling up” needs investment, not just rhetoric

Oh, well. Image: Getty.

Regional inequality was the foundation of Boris Johnson’s election victory and has since become one of the main focuses of his government. However, the enthusiasm of ministers championing the “levelling up” agenda rings hollow when compared with their inertia in preparing a UK replacement for European structural funding. 

Local government, already bearing the brunt of severe funding cuts, relies on European funding to support projects that boost growth in struggling local economies and help people build skills and find secure work. Now that the UK has withdrawn its EU membership, councils’ concerns over how EU funds will be replaced from 2021 are becoming more pronounced.

Johnson’s government has committed to create a domestic structural funding programme, the UK Shared Prosperity Fund (UKSPF), to replace the European Structural and Investment Fund (ESIF). However, other than pledging that UKSPF will “reduce inequalities between communities”, it has offered few details on how funds will be allocated. A public consultation on UKSPF promised by May’s government in 2018 has yet to materialise.

The government’s continued silence on UKSPF is generating a growing sense of unease among councils, especially after the failure of successive governments to prioritise investment in regional development. Indeed, inequalities within the UK have been allowed to grow so much that the UK’s poorest region by EU standards (West Wales & the Valleys) has a GDP of 68 per cent of the average EU GDP, while the UK’s richest region (Inner London) has a GDP of 614 per cent of the EU average – an intra-national disparity that is unique in Europe. If the UK had remained a member of the EU, its number of ‘less developed’ regions in need of most structural funding support would have increased from two to five in 2021-27: South Yorkshire, Tees Valley & Durham and Lincolnshire joining Cornwall & Isles of Scilly and West Wales & the Valley. Ministers have not given guarantees that any region, whether ‘less developed’ or otherwise, will obtain the same amount of funding under UKSPF to which they would have been entitled under ESIF.


The government is reportedly contemplating changing the Treasury’s fiscal rules so public spending favours programmes that reduce regional inequalities as well as provide value for money, but this alone will not rebalance the economy. A shared prosperity fund like UKSPF has the potential to be the master key that unlocks inclusive growth throughout the country, particularly if it involves less bureaucracy than ESIF and aligns funding more effectively with the priorities of local people. 

In NLGN’s Community Commissioning report, we recommended that this funding should be devolved to communities directly to decide local priorities for the investment. By enabling community ownership of design and administration, the UK government would create an innovative domestic structural funding scheme that promotes inclusion in its process as well as its outcomes.

NLGN’s latest report, Cultivating Local Inclusive Growth: In Practice, highlights the range of policy levers and resources that councils can use to promote inclusive growth in their area. It demonstrates that, through collaboration with communities and cross-sector partners, councils are already doing sterling work to enhance economic and social inclusion. Their efforts could be further enhanced with a fund that learns lessons from ESIF’s successes and flaws: a UKSPF that is easier to access, designed and delivered by local communities, properly funded, and specifically targeted at promoting social and economic inclusion in regions that need it most. “Getting Brexit done” was meant to free up the government’s time to focus once more on pressing domestic priorities. “Getting inclusive growth done” should be at the top of any new to-do list.

Charlotte Morgan is senior researcher at the New Local Government Network.