Forum Topic

Why Council Tax is Low in Hammersmith and Fulham

Once again our borough features in Private Eye this time over housing policy.  There were 1204 families and individuals living in temporary accommodation that the borough was responsible for last September.Between 2006 and 2011 the Council sold 104 council houses. Since 2011 184 have been sold raising a total of £70 million. The amount spent by LBHF between April 2010 and September 2013 on delivering social housing for rent according to an FoI request – nil.

Karen Taylor ● 3956d6 Comments

You have to consider what happens when you sell your housing stock. You cannot replace it with the funds received as the site has gone, and quite probably the receipt won't be enough to fund a local rpelacement on another site. The loss of a houding unit means you incur costs housing the homeless of whom there are - believe me - a large nmber, many of them "homeless at home" i.e. forced to stay at a family home they are desparate to leave (and maybe parents are desparate for them to leave too). Granny may want to downsize but cannot as there's nowhwre to move to. Of course you can fiddle the figures by simply striking nine-tenths of those on the housing list off it. The trouble is the Tories have such blinkers - they want to socially re-engineer the borough into something like the K&C or Westminster that is rid of all its poor and all its ordinary working people, and left with nothing but yuppies and oligarchs.

Dan Filson ● 3863d

But the point is that Councils are not selling off assets in a fire sale - they are selling when prices are at historic highs. If they are wrong and prices carry on going up they will look stupid, if they are right and prices fall as interest rates rise they will have gone a long way to ensuring services can be maintained in more economically challenging times.

Andy Jones ● 3877d

But debt has to be considered alongside assets; provided the debts were incurred buying assets of at least equal value, the "balance sheet" remains in blaance nad indeed is enhanced as the proportion of debt relating to poor assets shrinks. If you can service the debt and the asset appreciates over time, you're on a winner. Council assets run into hundred of millions of pounds so selling them off in a fire sale makes no sense. Holding housing stock makes sense to local councils as otherwise the bill for homelessness can suddenly run away from control. There are ocuncils forced to house homeless in hotels because the old supply of B&Bs has run outl. This cannot make sense.OUt at its simples the Council Tax is low in LBH&F because the Tories in power for ideological reasons dont believe in councils running services and shut down what they can. Simple as that, ultimately.

Dan Filson ● 3877d

I don't want social cleansing but it needs to be accepted that all Councils have a fiduciary responsibility to dispose of housing stock if the price rises to the extent that a property can be sold and the money raised used to benefit the community more effectively.You talk about reducing debt as if it is not really worth bothering with. I don't know the situation with H&F but in Ealing the debt situation is a concern. This is particularly the case if you take into account unfunded pension liabilities which would put the Council about a billion in the red. With current low interest rates this isn't an urgent problem but you won't be able to sell properties at such high prices when interest rates rise. The debt of any council is probably made up of a range of borrowing at different rates and by selling assets and paying off the most expensive debt, substantial savings can be made.Most London Councils are doing this at the moment so it is not necessarily a case of evil Tories in Hammersmith engaged in screwing the poor. At the moment this seems to be a debate conducted without any evidence - how does H&F's asset disposal compare with other London Boroughs? You would expect it to be a bit higher because property prices are higher across the whole borough than say Ealing or Hounslow so you'd need to show that disposals were a multiple of these other boroughs to prove that H&F was engaged in gerrymandering.

Andy Jones ● 3931d

IF you want social cleansing of the borough, removing from it all the residents who are poor, then yes, selling off every unit of housing that falls vacant may make sense. But Lady Porter and her chums came unstuck trying this in the City of Westminster, where because they were driven to keep Wesrtminster safe for the Tories (they had had a narrow squeak in 1986) and the same should happen in Hammermsith & Fulham where perfectly usable homes are being sold off. I doubt this has much to do with the level of council tax as the receipts are applied to reducing the level of council debt. One of the problems with both the Coalition governemnt and tory councils locally, is they only look at obe side of the balance sheet, the debt side. The other side of the balance sheet is the assets side. IF you sell £50 million of assets and get a receipt of £50 million, then yes you do reduce the debt level and thus the debt charges on that debt, but you also lose the useful assets which the debt represented and the income that flows from them. It's worth pointing out that when purchased the housing units probably cost a good deal less than their values at the tine of disposal so represented very good purchases indeed.  If you sell under Right-To-Buy leglislation at a substantial discount, you don't even get an amount of receipt to match the current value of the asset disposed of. So not so clever. But the Tories and their political allies can be characterised as seemingly knowing the price of everything and the value of nothing.

Dan Filson ● 3933d

Is it not the case that Councils are very restricted in how much housing they can build and therefore the amount spent on 'delivering social housing' would be nil for most councils?Also, surely it is a sensible policy with prices so high to dispose of some of the Council's housing stock.

Andy Jones ● 3946d