Birmingham takes stock

For the anti-transfer lobby it was the coup of the year, while for transfer supporters it was a humiliating defeat.

Other councils with transfers planned will now be looking nervously at what anti-transfer activists might do, and revising their campaign plans.

The run-up to the ballot read like some cheap daytime soap, with accusations of bullying and underhand tactics and taunts from both sides of the fence – each side classing its opponents as ‘loony lefties’ or ‘demons of privatisation’ respectively.

What made the final result even more surprising was that it was not close, as so many had predicted, but was a resounding ‘not on your life’ rejection.

The ‘yes’ vote in Glasgow, announced four days before, had lulled some into a false sense of security, convincing them that Birmingham would follow suit.

But the Glasgow transfer campaign had not been without its problems – tenants were caught up in a war of words between various politicians and activists.

However, despite the feuding, Glasgow has been given a green light for transfer. As a result it will have its housing debt written off and the council will get a redemption charge of £100m paid by the Scottish Executive.

In addition, Glasgow Housing Association, which will take control of the properties, will be able to borrow around £800m for renovations and for the demolition of the 11,000 homes that are deemed too expensive to renovate or to be beyond repair.

With such a positive example, people had assumed that Birmingham tenants would follow the script laid out for them – even if the margin was slim.

But it was not to be: this is a saga that looks set to run and run.

As the two largest stock transfers in Britain, both Birmingham and Glasgow were fundamental to the government’s target of delivering decent homes by 2010.

A breakdown shows that Birmingham was planning to demolish 24,000 homes – double the number in Glasgow – and around 300 tower blocks would be pulled down, compared with 200 in the Glasgow.

Certainly the demolitions issue ignited arguments, with the anti-transfer lobby in Birmingham questioning how the shortfall in the number of properties would be made up, as not all those properties destroyed were being rebuilt.

Transfer supporters countered by pointing out that the present level of housing did not reflect need, so it was not simply a case of rebuilding every home that was demolished.

But the reasons for the Birmingham defeat are many and varied.

John Perry, policy director at the Chartered Institute of Housing, said: “There’s been a vigorous ‘no’ campaign in Birmingham and it wasn’t as clear as it was in Glasgow. There was also a problem of getting the message across to tenants.”

He pointed out that Sunderland’s successful transfer had had a longer campaign aimed at only one third as many tenants as Birmingham.

And it was not just the ‘no’ campaigners who drove the nail into the transfer plans’ coffin, as the institute has identified.

To start with, Scotland simply does not have the number of alternative options for raising large-scale investment in council housing that English councils now enjoy.

And with the Scottish Executive making it clear that the only route for councils to raise funds is through transfer, the reality of a ‘no’ vote was much clearer.

There is also a difference in the impact on rents that transfer would have had for each city. In Glasgow, council rents are already relatively high and tenants have been told there will be a rents freeze. There is also no great disparity between council rents and housing association rents.

By contrast, in Birmingham rents are set to rise due to the rent convergence policy, but tenants may have associated the transfer directly with an increase in their rents.

If this is the case, it backs up the view of some housing insiders that the government may have to do more to explain to communities what stock transfer means for them.

Glasgow also had a history of small-scale community-based transfer in the city. In Birmingham, only a few large-scale partial transfers have previously taken place. Glasgow tenants were able to see first hand the effects and advantages of transferring.

Mark Weeks, national coordinator for Defend Council Housing is quite clear why he thinks Birmingham’s anti-transfer campaigners won the battle: “In Birmingham there was a proper campaign, we got tenants on board and we had the backing of the Labour group. As far as a plan B goes, I think the council is talking about partial transfers or arm’s-length management companies, but they’ve spent so much money on this they don’t know what to do.”

One source said the situation raised interesting questions as to where the city would go next in terms of regeneration.

Both the private finance initiative and arm’s-length management routes had been ruled out, because the council could not meet the requirements.

The source said: “If there were more rejections then it could become serious. I don’t think it will shift their view of social housing investment but getting to the level of the decent homes standard may depend on the number of stock transfers.”

Certainly it would be fair to say that the council was taken aback by the result. Dennis Minnis, Birmingham’s cabinet member for housing, said it was, “a big surprise – all the indications were that the vote would go in favour”.

The decision means that the investment in housing stock is now “dead in the water” according to Minnis, as none of the alternatives would bring in anywhere near enough investment.

He points out that the total national allocation for funding arm’s-length management is less than the amount Birmingham alone needs.

And it remains unclear where the council goes from here, since all the alternatives have previously been ruled out.

Defend Council Housing is clinging to the idea that the council will meet the decent homes standard by taking as gospel DTLR secretary Stephen Byers’ remark that all council housing would be bought up to the decency standard by 2010.

However it is hard to see how a council in such dire straits financially is going to be able to afford to meet the decent homes standard.

Perry believes that one option would be to go down the partial transfer route, but again this would call into question the 10-year target.

The only thing that is clear is that Birmingham will have to think long and hard about what it does next.

Certainly, those tenants who showed such faith in the council by voting to stay with it will be less supportive if they have to remain in squalid housing for the next 20 years.

And that is what could turn this story from a soap opera into a Greek tragedy.