Labour accused of breaking manifesto pledge on new council homes

Senior Haringey Labour councillors have been accused of breaking a key manifesto pledge over plans to charge higher rents for hundreds of newly-built council-owned homes.

Cabinet papers reveal more than 800 of the new council homes funded by the Greater London Authority (GLA) could be charged at London Affordable Rent (LAR) levels rather than the lower ‘formula rent’ level – meaning renters would face paying at least an extra £12.61 per week at current rates.

LAR is set at around 50% of the market rent, while formula rent is calculated using past property values, local earnings and property size, which works out at a lower rate. The proposals are set out in the council’s budget plans for 2023/24, which state that using LAR is the best way of maintaining “financial sustainability” because it qualifies for GLA grant funding of £100,000 per unit.

The budget report states that LAR is 8.1% higher than the maximum formula rent level, or ‘cap’, which works out as £12.61 per week more expensive for a one-bedroom home, increasing to £14.85 per week more for a four-bedroom property.

Campaign group Haringey Defend Council Housing says LAR rates are significantly higher than the borough’s average social rents, which are lower than the cap. Ruth Gordon, the council’s cabinet member for housing, said soaring inflation and interest rates had left the authority with little choice but to charge higher rents for some homes.

Noah Tucker, a Labour member and former Haringey councillor, spoke against the plans to charge higher rents during a deputation to the cabinet meeting. He was joined by Paul Burnham from Haringey Defend Council Housing, housing campaigner Florence Allaway, secretary of Tottenham Labour Party Jessica Tabois, and foodbank co-ordinator Anne O’Daly.

Noah told the meeting: “This is effectively the abrogation by the majority party of the key, single most important part of its manifesto – that is, to build council homes at council rents, and in fact 3,000 high-quality council homes at council rents.

“It doesn’t say affordable rents, it doesn’t say London Affordable Rents, it says council rents, and everybody is absolutely clear what that means.”

Noah added that a scrutiny meeting had been told that LAR for one development could be £30-35 per week more expensive than formula rent. Asking for more details on the financial basis for the proposal, he called for a rethink of the plans and a proper discussion with the community.

In response, Cllr Gordon said the council was still “absolutely committed” to delivering 3,000 new council homes by 2031. But she added that a 33% rise in construction costs over the past year coupled with rising interest rates meant that the housing programme “can’t be delivered in the same way”.

Cllr Gordon told the meeting: “There’s nobody, least of all me, that would want to change the way in which we are having to put this programme forward, but we don’t have any other option. The only other option would be to put the programme on hold.”

The cabinet member claimed LAR homes were still council homes, as they would be owned by the council, rented on secure tenancies and accept people on the housing register.

Prior to the meeting at George Meehan House, residents staged a protest against low-traffic neighbourhoods (LTNs) outside after marching through Wood Green. It was the third anti-LTN demonstration in three weeks and followed the revelation that fines generated from both LTNs and ‘school streets’ were expected to raise the council £5.7million during the next financial year.

In the meeting, residents Victoria Ward and Karen Cartwright questioned cabinet members on the LTNs. Victoria asked how they could convince people that the LTNs “are just trials and that you do not just have your hands in our pockets to fill your budget deficit”.

Mike Hakata, the council’s deputy leader and cabinet member for climate action, environment and transport, replied that the budget projections were based on the level of “high contraventions” seen during the initial weeks of the schemes. Any money from LTN fines was legally ringfenced so it could only be used to improve transport infrastructure, he added, insisting that the council was aiming for “total compliance” with the schemes, which would mean having to rewrite the budget.

Karen asked about the legal basis for the LTNs, the data that was being collected and how it would be used to judge the schemes’ success or failure, and why LTNs were needed given that the borough is already in the Ultra Low Emission Zone (Ulez).

Cllr Hakata replied that the legal foundation for the LTNs was an experimental traffic order. He said feedback from residents would be used, along with air quality monitors and smart cameras. There would also be incremental data collection after six months and twelve months using automatic traffic cameras and ‘turning counts’ used to count cars, he added.

The cabinet member said the Ulez was focused on getting rid of highly-polluting cars but there was still a need to reduce journeys in order to improve air pollution.

Cabinet members agreed to hold a public consultation on the 2023/24 budget, which includes plans for a 1.99% rise in core council tax and a 1% increase in the adult social care precept. The council plans to invest £11.9m in children’s and adults’ services, but despite making further savings it still needs to close a £3m gap to balance the books.

Following the consultation, the final budget will be presented to cabinet on 7th February before being considered by full council on 2nd March.