‘Bristol’s council housing failings are shocking – but are just the tip of a massive national iceberg’

Decades of underinvestment in council homes by central government have led to unacceptable living standards for tenants, in our city and across the country. A national solution is needed.

Illustration: Alex Diamond

Opinion 6th August, 2024

Paul Smith (Elim Housing Association)

In July, Bristol City Council received a shocking regulatory verdict on its council housing – in particular its huge repairs backlog and poor record-keeping. But the roots of its problems are complex, and not unique to this city.

Other large housing authorities have already been similarly criticised, as well as being called out by campaigners and journalists. Many council housing landlords will likely find themselves on the wrong side of new consumer standards, introduced last year, which Bristol has fallen foul of.

The reasons why go back decades. In 2000, then-deputy prime minister John Prescott introduced the Decent Homes Standard in response to concerns about council housing, which had been in decline since 1980, when tenants were given the right to buy their homes. Within 10 years, a million were sold – 20% of all council housing, and closer to 40% of actual houses. Lost rent money negatively affected the quality of remaining homes. 

Whatever the answer, this is a national problem – and needs a national solution

Decent Homes required them to be brought up to a fairly low, minimum standard. Councils were told to assess whether they had enough money to do this – and to keep homes ‘decent’ for 30 years. Those which did not had a couple of options. 

One was to convert their housing department into a housing association, as happened in Bath, South Gloucestershire and North Somerset. Another was to set up a council-owned arms-length management organisation (ALMO) – Gloucester, Cheltenham and Bridgwater did this – and get a government grant to upgrade homes. Nationally, about half of all council homes were ‘stock-transferred’ to a housing association, or taken on by an ALMO.

But Bristol’s tenants vehemently opposed both choices, seeing them as privatisation. So the council decided to soldier on without any extra resources. 

Rent reduction trap

Fast forward to 2010 and the election of the Tory-Lib Dem coalition. One of its biggest early cuts was to money for new social housing. To keep housing associations building, the government introduced ‘affordable’ rents. These were higher than traditional social rents, bringing in extra money for new homes with the bill – on paper at least – being picked up by tenants. 

A deal was also agreed with social landlords allowing rents to rise by inflation (CPI) plus 1% every year for 10 years from 2015. Separately, the government abolished the Housing Inspectorate, removing external oversight of council housing services and standards.

But then-chancellor George Osborne soon realised most measures to increase rents were actually being covered by housing benefits, which many tenants claim. In 2015, he announced that social landlords must instead cut rents by 1% each year for four years. In that period, the rent Bristol lost directly from the cut was £57m, but because its knock-on impact accumulates over years the amount to date is £141m. 

Over the period of the council’s 30-year business plan, almost £750m will be lost due to the rent reduction – plus many hundreds of millions in borrowing capacity. The impact on repairs spending is shattering. It has been exacerbated by the aftermath of the Grenfell fire, which has rightly led to enormous sums being diverted to fire safety measures.

There is also another large elephant in the room. Most council housing in Bristol, and nationally, was built in the 1950s and 60s, meaning it is 60 to 70 years old. 

That wouldn’t be a problem if it was well built. But, as I explain in my book Hartcliffe Betrayed, much of it was cheaply thrown up to address a postwar housing crisis and subsequent baby boom. A report produced by Savills in 2020 said around 20% of Bristol’s council homes needed replacement, with many others requiring upgrades. 

The cost of doing this, while retaining the same number of council homes, runs way past £1bn. That’s just in Bristol. Nationally the figures suggest 300,000-400,000 homes may need replacing – at astronomical cost. Here and elsewhere, tenants have been caught in a trap, where politicians lower rents without being clear this means homes will deteriorate and services decline. 

The Chartered Institute of Housing has recently called for the government to write off half of council housing debt. There has also been a demand for more money for regeneration – knocking down and replacing homes. 

But as shown above, the amount needed is billions at a time when the government is reluctant to commit to new spending. Locally, the council and its development firm Goram Homes could explore regeneration partnerships – but the danger is, the number of council homes might reduce while the waiting list is over 20,000 households. 

Could the government resurrect the stock-transfer programme after the failures in Bristol and elsewhere, leading to the end of municipal housing? Whatever the answer, this is a national problem – and needs a national solution.

Paul Smith is the chief executive of Elim housing association, and was Bristol City Council’s cabinet member for housing 2016-2020 and a member of its Housing Committee 1988-1998.