“Whatever the restrictions they face, the choices councils make are political ones”

Manchester Town Hall. Image: Getty.

How we run local communities, what services are provided and by whom, are deeply political questions. The philosophical traditions of the two main parties in Britain differ greatly on state involvement at every level: national, local and international.

So I take umbrage when people try to divide politics neatly into pragmatism and ideology. This was the argument set forth by Claire Kober, until very recently leader of Haringey Council, and the woman at the eye of the storm over the Haringey Delivery Vehicle programme to build new homes and regenerate old council properties. There are already a million articles written on that topic, so I don’t intend to go into the rights and wrongs of the case here. What concerns me is the framing of politics vs pragmatism that Kober sets out.

It is certainly the case that the left can put unreasonable demands on Labour councils. Local authorities are severely hampered both by austerity and by overbearing central restrictions: few seem to understand this when calling for illegal budget setting or non-statutory services that are impossible to deliver without outside investment.

It’s the case, too, that the reason the system is close to breaking is the pressure put on councils by the extreme ideological cuts to their funding that have crippled them since 2010.

But the opposite of unreasonable is not apolitical. Whatever the restrictions they face, the choices councils are political ones. Claire Kober describes herself as a pragmatic socialist – but as such, the people who agree with her need not just to make the case for pragmatism, but to argue why their pragmatism is socialist too.

Equally, the MPs who have declared no confidence in Northamptonshire County Council need to explain how – under their government’s ‘devolved axe’ – they would do things differently in and for their county. If they believe in letting local government be freer, leaner and less dependent on central grant money, they need to make the capitalist case for that freedom, and the winners and – inevitably – losers that competition creates. How would their national vision translate to Northamptonshire, its local challenges, demographics and needs?

But unfortunately, across the board in politics, we give very little priority to the local. This means that in general, it is not politics that's missing from most conversations about local government, but politics at the right level. Too often, litmus tests on national or international issues decide who a faction of the local party will back when it comes to council selections. In Labour, a person's view on the Middle East might well trump their vision for local service delivery. For the Tories, it's their view on Brexit, not bins, that really matters.


Voters are often the same, punishing local politicians for decisions made by national parties, seeing council elections just as referenda on the government of the day or how they think the opposition is doing. The parties reflect this by running election broadcasts on national issues or national leadership. It wins them votes, so you can understand it – but more and more, we denigrate the understanding of what local government does, who does it, what they do it for and why.

Labour councillors are not making decisions about private investment because they are ideologically wedded to the private sector. They believe, as all socialists and social democrats do, in using the state to improve the lives of the people of their boroughs. They just believe that under current circumstances, the kinds of challenges they face need far greater investment than the government is willing to provide. So, they feel they have to look to the private sector to do so.

Equally, most of the left is not opposing these decisions because they want to stop new housing being built, but because they genuinely believe there are better solutions that don’t lead to a diminishing of public stock. They are willing to trade conditions likely to lead to short term inaction for a chance at better solutions long term.

As to the Tories, they believe that a reduction in state dependency is going to be good for people in the long term. And so, they need to make the case for how that works in areas that fall short as Northamptonshire has, instead of simply playing the blame game. The party of central government and the party of local government in Northamptonshire are the same. If these MPs want to make the case that the failure there isn’t a Conservative one, they will need sharper answers than simply devolving blame.

There may well be answers that speak to both short and long term radicalism. But to find them, protagonists from both sides of Labour’s factional debate or the Conservatives national/local split will have to adopt a better, more open, understanding of where each side is coming from. If local Labour Parties can drop the fights over national issues, it might be possible to allow their shared ideology to come up with a solution that serves their community best. If Tories can work together to support local government struggling to impose national cuts, they might find better ways of delivering at each level. There may well be compromises that can be found through imagination, local action and local knowledge – but to find them, parties will have to set aside their internal differences and do the hard work of agreeing strategy and delivering for the people who elect them.

We need to put ideology back into the local government conversation. As politics has become more ideological again, it is important that the parties are able to offer their communities fierce competition over what they will do for and with them. If Capitalism or Socialism don’t work locally, they can’t work nationally. Big ideas don’t have to be played out on big stages.

 
 
 
 

The number being helped by Help to Buy is at a record high. That’s not a good thing

Help to Buy, Bristol, 2013. Image: Getty.

James Brokenshire the secretary of state for the Ministry of Housing, Communities and Local Government (MHCLG) has been having a busy week. On Monday, the department published its rough sleeping strategy, while Tuesday saw the release of the long awaited social housing green paper.

Neither has filled commentators or the housing sector with much confidence – not least because they offer no new support for genuinely affordable homes. This is a problem because, well, there aren’t enough and building more will cost money. 

Since 2010, affordable housing funding has taken a significant hit. Financial support for building social rented homes, where rents are linked to local earnings, has been cut in favour of rents set at 80 per cent of market rents. As a result the supply of new homes at social rent has dwindled dramaticallyIPPR research has shown that, across the country, the so-called affordable rents which have replaced them are simply too expensive for many households on low incomes.

This lack of a support stands in marked contrast to government’s approach to homeownership, as figures released today on sales through the Help to Buy show. Help to Buy loans, in which government lends a household 20 per cent of the value of a new build home (40 per cent in London), are at a record high. To date, around 170,000 homes have been sold through the scheme.

But the Help to Buy policy has two key problems. Firstly, far from supporting those who otherwise couldn’t afford to buy, the scheme is instead assisting households who would be able to buy at some point without support; lower income households continue to be priced out. The government’s own analysis shows that many of those buying through the scheme would have been able to buy at some point in the future without the scheme.

At the same time, the data released today shows that more than a third of those who have made use of Help to Buy to date have household incomes of £50,000 or higher. Around 1 in 10 of those who have bought through the scheme have a household income of over £80,000.

Secondly, far from improving affordability, Help to Buy worsens it. Research by the housing charity Shelter has shown that, through boosting demand for scarce housing, Help to Buy has inflated house prices. 


The main beneficiaries of this are the developers who have factored the scheme into house prices and as a result have seen a significant increase in their profits. Take, for example, the excessive bonus paid to the CEO of Persimmon Homes earlier this year of £75m (originally £100m), which stoked such shareholder and public fury: that was linked to a surge in profits driven by the Help to Buy scheme.

Both of these critiques demonstrate that government is currently not putting its balance sheet to best use. To date, Government has leant out £8.9bn through the Help to Buy. In 2017 alone, the money could have been used by councils to build somewhere in the region of 22,000 homes for social rent, over 400 times the amount actually built in 2016-17.

Letting councils borrow to build affordable housing would make significant steps towards delivering the 145,000 affordable homes which are needed each year, tackling poor housing conditions, over-crowding and poverty. At the same time, it would generate a return for councils, which could in turn be used to invest in more affordable homes and improve existing ones.

Yet, our absurd national accounting rules currently prevent this from happening. Help to Buy lending is not counted towards the deficit. This is because, asGeorge Osborne boasted when launching it, the Help to Buy scheme is a financial transaction, and therefore the taxpayer would be “making an investment and getting a return”.

By contrast, under rules imposed by the Conservative Government of 2010-15, councils are subject to a debt cap on what is called the housing revenue account. This prevents them from borrowing prudently against future rental streams to build council homes. This is despite cries from the Local Government Association that councils want to get building in order to tackle the housing crisis.

On a more positive note, the social housing green paper indicates that the government is starting to budge on this. It has already lifted the borrowing cap slightly in areas with pressure on affordability and is using these schemes to test the possibility of going further. 

This is welcome, but as the social green paper shows warm rhetoric on its own is not enough. Government should commit to changing the borrowing rules, lifting the local authority debt cap and phasing out help to buy.

Darren Baxter is a Research Fellow at IPPR he tweets @DarrenBaxter.