Housing

The 1984 Labour Manifesto for Manchester committed the Council to no council house rent increases until April 1986. When Sam Darby was Chair, the Housing Committee agreed to no rent increases for 1987/88, but this hadn’t been agreed by the full Labour Group, who overturned it. This was one of the issues that led to Sam Darby resigning as Chair of Housing and the Labour Group splits described in chapter 12. Dave Lunts took over as Chair, and then after Bob Young was dismissed from the post of Director of Housing in 1989 (see chapter 13), Bob King took on that responsibility as well as being City Architect.

The Local Government and Housing Act 1989 brought in requirements for the local authority to establish a Housing Revenue Account (HRA) that ring-fenced all housing income and expenditure, and prevented any subsidy to or from any other parts of the Council’s budget. In 1990 a mistake was made in the submission for the HRA subsidy, which meant a £14m loss. In 1993 Steve Mycio was promoted to Director of Housing and the Housing Committee combined with Environmental Health.

The process of transferring housing stock to housing associations was led by Claire Nangle, Deputy of the committee, who then became Chair in 1995, when Dave Lunts stepped down because of the conflict of interest of him working for the Housing Association that won the transfer deal. Under Claire Nangle’s leadership, pioneering work on probationary tenancies, led to senior housing officer Bill Pitt’s secondment to advise the 1997 Labour government, and the national introduction of ASBO legislation.
Jump to Editor’s Comments

Party Manifesto Commitment on Council House Rents
Prior to the third consecutive Tory election win in the 1987 general election, the three major housing policy issues in Manchester were the level of council rents, the large number of empty properties (‘voids’) and the decreasing number of council properties available to rent. The latter caused by a combination of the ‘right to buy’ legislation and the reduced number of houses being built every year. With the increasing restrictions on the amount of money that the Council could borrow, the capital programme had shrunk significantly in the 1980s and very few new houses were built. At the same time, the deterioration in the condition of the existing stock was a great concern. Rent levels and voids continued to be high profile issues after 1987, and added to these two was the issue of stock transfers – the government’s insistence that council houses be transferred to management organisations not controlled by the Council.

In relation to rents, the Party’s policy was that they should be set at a level to cover only the cost of repairs, maintenance and management, and not the interest charges from capital borrowing or any other housing services. The 1984 Manifesto stated (in capital letters) that there would be

“NO RENT INCREASES IN THE MUNICIPAL YEARS MAY 1984 TO APRIL 1986”.

The 1986 Manifesto reiterated the policy in relation to what rent income should cover, but made no statement about a rent increase for the forthcoming year. At the City Party’s special budget meeting in January 1987, four resolutions were carried, three of which specifically stated that there should be no rent increases.

The Housing Committee (chaired at the time by Sam Darby) decided (in line with the Party’s resolutions) that there would be no rent increase in 1987/88, but this had not been agreed by the full Labour Group, and, in the light of the budget crisis, was going to be impossible to achieve. The Policy and Resources Committee referred the question of rents to the Council’s budget meeting. At the Labour Group meeting beforehand, after a very heated debate, members reluctantly decided that rents would have to be raised by £1.50 per week from 1 June (they also agreed that the rate rise would be 19.3%). If the rents had been raised from the beginning of the financial year, the rise would have only needed to be £1.25 per week, but the notices would then have gone out to tenants before the local elections, which councillors knew would be bad for them electorally. As it turned out, this manipulation was insignificant in relation to the election outcome (see chapter 11).

From this point on, decisions about rent increases were made by joint meetings of three committees – Housing, Finance, and Policy and Resources – thus ensuring that the Labour Group could not be ‘bounced’ on such a major financial matter or be subject to an embarrassing public split.

Replacing the Director of Housing
After the dismissal of the director, Bob Young, in March 1989 (see chapter 13), Dave Lunts (as Chair of Housing) had to get to grips with the raft of major issues facing the housing service. In addition to the ongoing problems in Hulme and the citywide issue of crime on council estates that he was dealing with as Chair of the Community Safety Working Party (see chapter 7), and the protracted negotiations with the trade unions in relation to Neighbourhood Services (see chapter 14), he was increasingly concerned about the poor quality of the service being offered to tenants.

Another major issue of concern was the high level of empty properties (‘voids’) in the city’s housing stock. In July 1989, the Council gave delegated authority to the Strategy Sub-committee to make any necessary changes to housing policy in order to ‘do something’ about the problem. The Strategy Sub-committee co-opted Nick Harris (chair of Finance) and the chair and deputies of Housing for this decision.

In order to tackle all these problems, Dave Lunts needed to find a new director to replace Bob Young. The initial attempt to fill the post by external recruitment was unsuccessful and so, in September 1989, it was proposed to the full Labour Group by Dave and Graham Stringer that the City Architect, Bob King, be appointed to a new joint post of Director of Housing and Architecture on a seven-year contract. At the Labour Group there was some heavy criticism of this proposal on three grounds – the use of a fixed term contract; Bob King’s lack of experience of managing a housing service; and the breaching of all Council personnel procedures.

In addition, some councillors felt that Bob King had not made a particularly dynamic contribution on the occasions when he was present at the Housing Committee and other meetings. He obviously had significant international architectural experience, but this was of limited use in managing a large housing service. Even so, despite the various reservations, the proposal was carried by a substantial majority.

Rapid Rent Rises
When it came to considering the rent levels for 1990/91, the Tory government’s new legislation had to be taken into account. The Local Government and Housing Act 1989 brought in requirements for the local authority to establish a Housing Revenue Account (HRA) that ring-fenced all housing income and expenditure, and prevented any subsidy to or from any other parts of the Council’s budget.

This legislation also dictated that council rents should rise to be comparable with rents in the private sector, but rather than expect tenants to bear a massive increase all at once, the rises should be phased in. In the meantime, councils were given a HRA subsidy to cover the shortfall.

As well as concern for the effect of these government-imposed rent rises on the tenants, the City Party and Labour Group knew that the Council would get the blame for them. This politically difficult situation was the subject of much debate, but eventually it was agreed to stagger the increases, with an immediate rise of £3 per week in February 1990 and a second increase of around £4 in July. All the information leaflets produced were to make it clear that it was the government and not the Council that was responsible for the rises.

Then, in May 1990, the housing officers told councillors that the government’s housing subsidy would be higher than expected, so the second rent rise didn’t need to be as high as had originally been estimated. This turned out to be incorrect (see later) but, not knowing this at the time, Dave Lunts proposed reducing the repairs budget by £1.2 million in order to keep the July rent rise to just £2.90 per week. This proposal was seconded by Graham Stringer, but Bill Egerton made a counter-proposal, seconded by Richard Leese, that the repairs budget should not be cut and the second rent rise should be set at £3.25 per week. After debate, the Labour Group agreed to Dave Lunts’ proposal.

The worst thing about having to increase rents was the knowledge that tenants were not getting a good service for what they paid. Dave Lunts wrote a paper for the Housing Labour Group in October 1990 spelling out what most councillors knew already – that as well as basic inefficiencies in quantitative performance (in terms of percentage of rents collected and number of void properties), the housing service suffered from qualitative weaknesses:

“In particular, the standard of repair service leaves much to be desired and the point of contact between the public and the housing service, either in person, by telephone, or by letter, is all too often a source of frustration and resentment for tenants, councillors and others. Manchester’s poor performance relative to other councils underlines the scale of the problems and strongly suggests that the service does not see itself as one primarily geared towards helping people efficiently.”

Although some of the basic failures in key areas, such as voids and rent arrears, were being addressed through a process of setting performance measures and organising management training, Dave was keen to see improvements in estate management by focusing on the needs of the tenants as people, rather than on the houses they lived in. Dave said that:

“Front line managers have no control over the basic functions which are the bread and butter of estate management”.

The consensus of the Housing Labour Group was that the political priorities over the forthcoming year would be:

  1. Greater local control over repairs and re-lets by area housing managers;
  2. Effective co-ordination of front-line services related to housing – ie cleansing (rubbish removal), grounds maintenance and housing benefits;
  3. Improvements to quality at every level – including better communication to tenants.

These improvements in service delivery were going to have to be achieved despite the reduced budget that was available from the HRA.

An Expensive Mistake
Later in October 1990, a major mistake in Manchester’s calculation of the housing subsidy came to light, which created an even bigger crisis for the politicians.

Manchester’s voids figure was huge at that time – around 8-9% of the stock – partly because of mismanagement, but also because a lot of the housing was unfit for habitation and awaiting demolition (so-called ‘capital voids’). These properties should have been excluded from the figures submitted to central government, but they weren’t. So the government subsidy was around £14 million less than it should have been. When this was realised, the government was deaf to subsequent pleas of calculation error, and refused to increase the subsidy. This mistake meant the gap of £14 million in the HRA had to be recovered in one year, so the rents had to be increased immediately by a further £4.20 per week. It was a huge additional amount for those tenants in work and not receiving housing benefit.

There was a big row in the Labour Group (and the City Party) about this, with demands that heads should roll. The District Auditor was commissioned to investigate the cause of the mistake and he concluded that in addition to calculation errors, senior officers had not fully co-ordinated the work of their staff or exercised adequate oversight. He didn’t apportion blame between the Director of Housing or City Treasurer, but a close reading of the report indicated that the blame lay with the Treasurer’s Department. At the time, the finance officers for each service were seconded from the Treasurer’s Department, so the City Treasurer was held to be ultimately responsible.

In the subsequent Labour Group meeting, there was a highly charged debate with motions put forward that the City Treasurer should be sacked or given a final warning. But Richard Leese, as Chair of Finance, defended him and, almost in tears, passionately argued that he shouldn’t be sacked as he wasn’t personally responsible for the mistake. The motions were heavily defeated, perhaps partly because councillors were worried about the amount that might have to be paid in compensation, bearing in mind how much had been paid out to the Director of Housing. Eventually a motion of no confidence in the City Treasurer was carried by 26 votes to 23.

At the following Finance Labour Group, Richard proposed that the City Treasurer be given a set of objectives and that action would only be taken if he failed to achieve them. According to David Black, Dave Lunts strongly opposed Richard’s proposal, but as the Council had not taken any specific action against the Treasurer prior to that, David Black argued that Richard’s proposal was perfectly in order. The proposal was agreed, albeit reluctantly. No officer was actually disciplined for the mistake, but Graham Stringer was so angry with the City Treasurer that he wouldn’t speak to him any more – a humiliating situation for any senior officer. Eventually, in 1993, he left for a post in another local authority. The two finance officers thought to be responsible for the error left the Council in 1991.

Ironically, there was a silver lining to the debacle in that once the mistake had been rectified, according to Dave Lunts:

“the HRA was awash with money so we could subsidise the capital programme and increase the amount spent on repairs and maintenance.”

From this point on, rent levels had a lower political profile[1].

Rent Arrears
In addition to the matter of rent levels, there was a huge issue about rent arrears. At the start of the 1988/89 financial year, £14.6 million was outstanding; by 1989/90 £21.8 million was owing; and at the start of 1990/91 £28.2 million.

In January 1991, Dave Lunts reported to the Labour Group that although the collection rate was currently around 97%, the historic debt was phenomenally high. This had largely come about because of the change in rates charges (rates being collected from council tenants together with rents) from April 1988, whereby even the poorest tenants had to pay 20% of their rates.

The District Auditor had raised this issue in his management letter in September 1990, saying that “Manchester is one of the worst in the country.” Tougher action had to be taken against tenants in arrears, although eviction was obviously no solution.[2]

Changes of Director and Committee
In October 1992, Bob King reverted to his position as City Architect only, having not succeeded in improving the management of the Housing Department. The Director of Birmingham’s Housing Department was appointed as the replacement, but he couldn’t take up the post because he was on a fixed-term contract, and Birmingham wouldn’t release him from it. There was enormous anger that this possibility hadn’t been considered beforehand and considerable time and expense had been wasted. In March 1993, Steve Mycio was promoted from within the department. Steve had been a NUPE activist in the early 1980s but had worked his way up the department hierarchy to become an Assistant Director.

Changes to committee structures were introduced (see chapter 18) and the Housing Committee took on responsibility for Environmental Health, becoming the Housing and Environmental Health Committee. In May 1993, Dave Lunts was elected Chair of the new committee and was assumed to be starting a new four-year term, even though he had already completed three years as Chair of Housing. Two new deputies were elected – Claire Nangle, who was elected to the Council in 1991, and Gerry Carroll (see Appendix 20A for terms of office of all chairs and deputies of Housing 1984-1997).

Steve Mycio was encouraged by Dave Lunts to foster the talent within the department. One of the by-products of this fostering was that some of the union representatives were brought into the management structure and they knew intimately where the ‘bodies were buried’. Performance management was cranked up and a tougher style of management adopted. In October 1993, a dress appearance code was adopted by the Housing Department, in advance of other departments – something that would have been almost unthinkable in the 1980s. There is a view that Steve Mycio could have been a bit more conciliatory on some issues in the early days, but the size of the challenge was so huge that this would have been a difficult balance to achieve.

Transfer of Housing Stock
The next big attack on the Council’s housing policy was the government pressure to transfer its stock to housing companies. In 1984 Manchester had been one of the largest landlords in Europe, and, even with the sale of ‘right to buy’ properties and demolition of unfit properties, it still held a very large stock. The big problem the Council faced was the lack of resources to renovate and upgrade its properties – many of which lacked all modern conveniences – and the government restrictions on how much money it was permitted to borrow. In 1988 there were still around 12,000 unimproved inter-war dwellings and it was difficult to see how these could be improved within any reasonable time scale.

In 1984, housing associations relied on the Housing Corporation[3] for 90 percent of their funding. The 1988 Housing Act allowed housing associations to borrow privately on top of money they received from the Housing Corporation. The Corporation initially borrowed private finance on behalf of landlords but, after 1988, housing associations could borrow directly from lenders.

By transferring stock to an alternative landlord, who would have access to capital borrowing, the properties could be brought up to modern standards. But there was huge opposition to removing properties from local council control in the Labour Party, both nationally and locally, and among tenants’ groups. The national rules stated that tenants had to be balloted on any transfer, although it was only necessary to achieve a majority vote from the tenants who actually voted.

The Labour Group leadership was convinced that the overriding priority was to provide all tenants with decent, upgraded living conditions and that the only way to do this was by following government diktat and transferring the properties to companies that would be able to borrow money. But there was a real political will to ensure that the alternative chosen would be a social landlord – a housing association – rather than a commercial company based on private profit.

There was a need to persuade Labour Party members, and then tenants, to agree to this, and it would fall to the leadership of the Housing Committee to carry out the persuasion. However, Dave Lunts was at that time employed by a housing association, and so he couldn’t take any part in the campaign, because of a potential conflict of interest. It therefore fell to one of his deputies, Claire Nangle, to take the lead.

Claire conducted an extensive political campaign, going to a large number of Labour Party branch meetings and other political meetings, spelling out the options and the impossibility of retaining the status quo. At a full Labour Group meeting, however, she was ambushed by an idiosyncratic trio of Hugh Barrett, Henry Cooper and Arthur Maloney, who proposed that at least 50% of all tenants, not just those voting, should be required to vote yes for the transfer. This was agreed by the full Labour Group. Claire’s view is that this sharpened up efforts to maximise the turnout of tenants and led to some impressive ballot results.

The first attempts at stock transfers were in the Manchester overspill estates. These were in Partington, Bury, Macclesfield, Rochdale, Tameside and Trafford, and represented around 20% of the total stock. The case for changing the arrangements in these estates was particularly strong, since they tended to be relegated to the bottom of the queue for improvement work and the tenants did not have the opportunity to raise concerns with a local Manchester City councillor.

The first estate to be selected for possible stock transfer, with 1,500 properties, was in Partington. From January 1993, the Housing Department’s Tenants’ Participation Unit worked with Partington tenants to find solutions to the investment gap. The two best options that were pursued were to set up an estate management board/co-op or to transfer the properties to an existing housing association. The national Tenants Participation Advisory Service (TPAS) was employed to carry out a preliminary consultation exercise. One of its conclusions was:

“Manchester City Council should be congratulated on taking a difficult (but correct) decision to allow the work to go ahead. Not very many councils have seen the need to have a pre-voluntary transfer exercise. TPAS believes that Manchester City Council have allowed the creation of a model of ‘good practice’ in developing a tenant participation strategy for the proposed large scale voluntary transfer on the Partington estate.”

In May 1994, the tenants’ representatives interviewed four housing associations (out of seven chosen by the Housing Corporation) and in October that year voted for the Manchester and District Housing Association as their preferred association. Manchester and District proposed:

  • local, decentralised management;
  • high level of tenant involvement;
  • ring-fenced finances;
  • continuation of secure tenancy agreements.

Following the vote, detailed and extensive negotiations were carried out with all tenants.

Change of Chair of Housing and Environmental Services Committee
By now, there was increasing concern within the Labour Group on the Housing and Environmental Services Committee about Dave Lunts being employed by the housing association that had been chosen by tenants in Partington and the confict of interests that entailed. Even though he had no involvement in the Partington negotiations, which were all carried out by Claire Nangle, scurrilous rumours started to circulate that made his position as Chair untenable. Some Labour members also felt that Dave had become arrogant and out of touch, but there were always grumbles in the Labour Group about high-flying and competent committee chairs, who were resented by those who felt unable to compete.

In the spring of 1995, members of the Labour Group of that committee put pressure on Claire Nangle to challenge Dave for the Chair when the post came up for election in May 1995. Claire was initially reluctant, but knew that Dave didn’t have enough support in the Labour group to carry on. She spoke to him face-to-face to tell him she was going to challenge him, which of course made him angry, even though Claire had defended him against the rumours. Dave consulted Graham Stringer who also told him that he wouldn’t win the vote if he stood. So Dave decided to resign and told a Manchester Evening News journalist of his intention. The ensuing article was the first anyone in the Labour Group knew of his decision.

Claire Nangle was the only candidate in May 1995 and was duly elected as Chair, with Gerry Carroll and Bernard Selby elected as her deputies.

In October 1995, the first stock transfer ballot took place and 89.8% of tenants voted in favour of the transfer to Manchester and District Housing Association (now part of the Harvest Group).

When it came to the issue of council housing within Manchester’s boundaries, Claire proposed in May 1997 that a new local housing company, the Willow Park Housing Trust, should be established to take over the ownership and management of 6,700 properties in Benchill and Sharston in Wythenshawe. The proposed structure of the board was four councillors, six tenants and five independent members but with the voting rights split into 49% council, 26% tenants and 5% for each independent member. Not surprisingly this was rejected by the government as an attempt to retain too much Council control and not meeting the Housing Corporation requirement that all board members should have equal rights. Eventually the company was set up with a board that was approved by the Housing Corporation.

Anti-Social Behaviour and Probationary Tenancies
In addition to the poor physical condition of properties on Manchester’s housing estates, the incidence of anti-social behaviour was increasingly making life for tenants intolerable. The improved collaboration with the police after 1988 meant a greater emphasis being given to community safety and a range of measures, such as improved street lighting and the introduction of neighbourhood wardens patrolling the streets, made some significant improvements, but this wasn’t enough.

Under the leadership of Claire Nangle as Chair of the Housing an Environmental Services Committee from May 1995, pioneering work was done on introductory/probationary tenancies and Anti-Social Behaviour Orders (ASBOs). Introductory tenancies give the landlord the right to terminate a tenancy at the end of a probationary period, if the tenant has failed to comply with his or her responsibilities, and a pilot scheme in north Manchester, covering tenants in both Council and Guinness Trust tenancies, proved to be successful. This led to the inclusion of probationary tenancies in the Tory government’s Housing Bill of 1996 and the first introductory/probationary tenancy in the country was issued in Manchester on 12 February 1997.

Claire and her deputies had to battle for the acceptance of introductory tenancies, as there was absolute opposition from the Chartered Institute of Housing and many Labour councils, including the London Labour Housing Group. The three of them (and almost all of the Labour councillors on the committee) were council tenants at the time, and they knew how crucial it was for the improvement of life on council estates to have well-behaved tenants. Introductory tenancies are now a pre-requisite for all social housing.

The most frustrating aspect of tackling anti-social behaviour, which was rife on most council estates in the city, was the difficulty in overcoming the intimidation of potential witnesses, and in getting sufficient evidence to mount criminal prosecutions against the perpetrators. Manchester City Council was the leading proponent of ASBOs, which are civil, rather than criminal orders, and do not require local residents to give evidence against perpetrators, but can be granted on the basis of evidence from council officials or police officers. This pioneering work in Manchester led to a senior housing officer, Bill Pitt, being seconded to advise the incoming Labour government in 1997 and to ASBOs being introduced nationally in the Crime and Disorder Act 1998. Bill Pitt was regarded as one of the country’s leading experts in the field and he spoke regularly at seminars up and down the country.

Appendices

Previous Chapter Contents List Next Chapter

Editor’s Comments

My summary has ended up quite long for such a short chapter. I added in the Act that brought in the HRA requirement and reworded that paragraph. Other than that this chapter has mostly had minor typographical edits and adding the sub-headings that weren’t in the original. I wanted to be more clear about where the government pressure to transfer housing stock to housing associations came from, in relation to what legislation, but so far I haven’t been able to find that out. I have included in the Further Reading section a number of interesting pieces on the wider issue of council housing, affordable housing and the effect of housing associations. This is as big an issue today as it has ever been.

Footnotes

[1] The Labour government’s system of target rents introduced from April 2001 was the final nail in the coffin of a locally-determined rents policy.

[2] Editor’s note – this issue about how rent arrears were collected seems incomplete and unsatisfactory to me, but that is all there is.

[3] The Housing Corporation was the government agency that funded affordable homes and regulated housing associations in England. It was set up in 1964 to promote low-cost rented and co-ownership housing, and ceased to exist on 30 November 2008. The responsibilities of the Housing Corporation were taken over by the Homes and Communities Agency and the Tenant Services Authority. Their website is archived here: http://webarchive.nationalarchives.gov.uk/20100113205514/housingcorp.gov.uk/

Previous Chapter Contents List Next Chapter

Further Reading

  • ‘Manchester powerhouse fears £280m HRA loss’ by Mark Lawrence for 24dash.com in Housing, 7th March 2016. History repeats itself! This article has a good explanation of the HRA issues much the same situation currently as described in this chapter.
  • Housing Act 1988
  • Local Government and Housing Act 1989 (enacted)
  • ‘Don’t look back in anger’, Inside Housing, 21 November 2008. This article gives a historic overview of the Housing Corporation’s 44 year history (with timeline).
  • Policy paper – ‘2010 to 2015 government policy: rented housing sector’ Updated 8 May 2015 www.gov.uk
  • ‘Systematic raiding of housing revenue accounts’, 20 June 2014, Inside Housing
  • ‘The end of council housing’, John Harris, 4 Jan 2016, Guardian
  • ‘The evolution of stock transfer housing associations’, Hal Pawson and Cathy Fancie, September 2003, Policy Press from the Joseph Rowntree Foundation
  • ‘The homelessness monitor: England 2016’, Suzanne Fitzpatrick, Hal Pawson, Glen Bramley, Steve Wilcox and Beth Watts, January 2016, Crisis UK

Leave a Reply

Your email address will not be published. Required fields are marked *