Back to articles • Back to home page

How housing fell down
Local Government Chronicle – 24 June 2005

What used to be a foundation of local government power is now in ruins - but do ALMOs provide a future? Mark Smulian reports

It was possibly local government's greatest contribution to public health and welfare. For five decades after World War One, council housing offered millions of people an escape route from slums into mostly well-built, well-maintained and, by the standards of the time, well-equipped homes.

Then it started to go wrong. In the worst cases, very badly wrong.

By the end of the 20th century, councils had lost most of their best homes through tenants' right to buy or transfer to housing associations. Those that remained were starved of maintenance funds.

The days when Labour and Conservative politicians vied with each other to build the greatest number of council homes have been replaced by a consensus between the two largest parties that council housing is an anachronism.

There are some recent green shoots. The new arm's-length management organisations - council-owned but operationally independent - offer the prospect of imaginative management and improvement for these homes, and a few new council homes are being built after a gap of nearly 20 years.

But council housing is a tale of how changing aspirations, erratic finance and botched building techniques brought down one of local government's greatest achievements.

Its origins lie in efforts by Victorian social reformers to relieve the poverty of people crowded into urban slums at the mercy of unscrupulous landlords.

Councils gained some limited housing powers in the 1860s, but it was the 1890 Housing of the Working Classes Act that first allowed them to provide homes. Few took advantage of this because there was no realistic subsidy from central government, a factor that was to become a recurring theme.

Piecemeal legislation meant only 28,000 council homes were built before the 1919 Housing Act ushered in the era of 'homes fit for heroes'. Even so, the emphasis remained on councils' financing the rehabilitation of substandard private rented housing, with some 300,000 homes improved through statutory orders against landlords.

A switch from rehabilitation to new building came with the short-lived Labour government of 1924, which improved subsidies in a process that eventually enabled 500,000 homes to be built.

Slum clearance programmes introduced in 1932 encouraged the construction of a further 250,000 council homes up to the outbreak of World War Two in 1939.

Wartime bomb damage led to a housing crisis for the Attlee government, which instigated the construction of 800,000 council homes in 1945-51. Its Tory successor had used the housing shortage as an election issue and at least 100,000 council homes were built each year until 1964. This was council housing's heyday.

But a change to the subsidy system in 1956 encouraged councils to experiment with prefabricated system-building technologies.

Structures unfamiliar in Britain, such as high-rise blocks, began to appear.

Out of scale with their surroundings and with the pattern of communities, the tower blocks and multistorey deck access 'streets in the sky' were only briefly popular before problems emerged.

System building was inadequately understood and poorly applied, and leaks, cracks and damp caused by poor materials and workmanship became commonplace.

Even so, by 1966 blocks of five storeys or more accounted for more than 25% of new council housing.

System building's reputation suffered irreversible damage one spring morning in 1968, when a gas explosion which might have caused only localised damage in a normal building, felled most of Newham LBC's Ronan Point tower block.

Amazingly, just four of the 260 residents were killed, but the technique left a legacy of badly built, hard-to-maintain estates where few wished to live.

Location also emerged as a problem.

Peripheral estates had appeared on the edge of towns, inspired by a combination of cheap land and a belief in the virtues of plentiful open space.

But serious social problems soon arose from the practice of housing thousands of poorer people together remote from jobs, shops and amenities.

The economic problems of the 1970s saw steadily lower levels of investment in building and maintenance and, in 1980, the Thatcher government introduced right to buy.

This proved a huge vote-winner for the Conservatives among richer tenants who wanted to join the owner-occupier majority. Rapidly, councils were stripped of their most desirable homes and left with 'the rest'.

A combination of government cuts and loss of rents from sold homes meant they had inadequate funds to maintain what remained.

Further radical change came in 1989, when funds for new social housing were switched to housing associations. Many cash-strapped councils encouraged their tenants to vote for transfer to a housing association, the only route by which money could be borrowed for refurbishment.

Jim Coulter has seen a substantial chunk of this story unfold as a trade union housing researcher, as housing chair and then Labour leader of Dacorum BC in the early 1970s, and for 17 years until his retirement this month as chief executive of the National Housing Federation.

He says: "I think that, in the first three-quarters of the 20th century, it was public housing that made the biggest impact on social conditions, public heath and decent living for a large number of the population. It was remarkably successful in that context.

"The changes came with mistakes made. These were high-rise buildings, which went too far and produced an unpopular housing form, and system building, which was a disaster."

Alongside these technical issues, social attitudes changed.

Mr Coulter notes: "There was a change in perception about the offer council housing represented. 'Take what you are given' did not address the consumer-society era. Right-to-buy was part of it, but perceptions were changing quickly."

The search for private funding to replace the lost public investment led to "an irreversible trend to the end of municipal exclusivity", he says, as housing associations grew in importance.

Transfer to associations continued even more rapidly under Labour after 1997 and well over half of councils have transferred their homes.

Labour then devised the decent homes standard, a basic level of amenities that all social housing must reach by 2010.

Originally, any council that needed extra money for these improvements could get it only if tenants voted for transfer, or through the little-used private finance initiative route. Faced with accusations that this gave tenants a choice of 'transfer or rot', the government developed the ALMO option in 2001.

John Perry, former assistant director at Leicester City Council and policy adviser at the Chartered Institute of Housing, thinks ALMOs offer a reinvented role for council housing, which he says was once "the single most important contributor to public health".

Mr Perry says: "ALMOs now control more than half the stock and could remodel themselves with financial freedoms but in council ownership."

Their focus would be on regeneration, the vital first step in a virtuous circle.

The idea is that if council estates were pleasant environments, people would want to rent homes there, so ALMOs' rental incomes would be reliable and they could continue to invest in improvements.

ALMOs' long-term status will be negotiated with the government this year.

Three ALMO chief executives think they can see a way forward for council housing.

Derby Homes' Phil Davies says ALMO status "gave a single focus, a bit like a housing association.

"In a council you are part of a large organisation and housing sometimes does struggle to get onto the agenda."

"Regeneration is one key area," he explains. "Our stock is an average of 52 years old and we need to be able to regenerate those estates that need to be improved and to really get stuck into the housing that needs to be replaced."

Solihull Community Housing's Matt Cooney thinks the crucial question is whether the Treasury will agree that ALMOs - "adopted as a political fudge because the government needed an alternative to stock transfer" - can take charge of their own financial destiny.

Mr Cooney says ALMOs still give councils "a lot of clout" in housing, and could be allowed access to private investment without privatisation.

Chris Langstaff, of Hounslow Homes, calls ALMOs "the most exciting delivery vehicle in the sector for over 20 years".

"While the initial goal was to achieve the decent homes standard, we are now keen to become full players in the wider regeneration of our areas and in neighbourhood renewal," he says.

In the past decade, council housing has been widely assumed to be on its deathbed. But ALMOs now offer it a future, if an uncertain one.

It will be a long time, though, before ALMOs build homes on the scale of their predecessors of 50 years ago.

Back to top of page •  Back to articles •  Back to home page