Monthly Archives: May 2013

Help to Buy £130bn at a time of Housing Benefit cuts

Chris Giles, writing in the Financial Times today, makes very good points on the UK government’s Help to Buy scheme. This programmes starts in January 2014 for three years, using £130bn to guarantee 20% of new mortgages. It was announced in the March 2013 Budget and is already showing an impact in rising house prices in and around London. The Governor of the Bank of England has criticised this programme as unsustainable and bubble-making.

Reported elsewhere was the delight within HM Treasury when the Office of National Statistics ruled that the £130bn was private debt, not public debt, even though the government are on the hook for any losses.

A key point made in the article is that this programme redistributes wealth from new buyers to existing owners.

Another key point would be to question the cuts in Housing Benefit (bedroom tax, weekly cap, etc) while pumping £130bn into the mortgage market in the run up to the next general election.

Source: FT, 25/26 May, p13.

Cities, pop-up parks and green infrastructure

Ian Brown, of the Stone Roses, has said that “Manchester has everything but a beach”. Some would add that it misses a large central park, unlike say London and its grand Royal Parks.

A small group of guerrilla park-makers in Manchester, ParkStarter, is asking whether every open space needs to be covered in black top and turned into a car park. The current classic example of this type of use is the site of the former BBC studios on Oxford Road. The group plans to start somewhere in the Northern Quarter in Manchester.

Previously the only way forward would be for the local authority to buy the land, or have it donated, and to find a capital source to make the site work as a park, and find a revenue source to keep it functioning. With the massive cuts in UK local government finance, especially in the northern cities, this option isn’t working at the moment.

However, some parts of the private sector property market appreciate the importance of pop-up shops (for profit) and meanwhile shops (not for profit). Maybe there is a parallel here for pop-up parks?


Good Growth, Bad Growth and Cities

I’ve written previously on the good work being done at the Tyndall Centre at the University of Manchester by people such as Professor Kevin Anderson.

Recently he gave a presentation to a committee of councillors at Manchester City Council on different models of growth, and in particular on the environmental impacts of good and of bad growth models.

His talk emphasised that social goods (such as jobs, welfare, food, literacy, housing, transport, civil society) can be increased without also having to have people working long hours and emitting ever-more amounts of greenhouse gases which cause climate change. Youth unemployment should be addressed by large-scale programmes to retrofit homes for better energy efficiency, and by low-carbon transport works.

Manchester City Council are reported to have received this presentation enthusiastically, and agreed to incorporate environmental indicators in the city’s overall Dashboard.


Schools building programme hits massive funding gap

The previous UK government’s programme, Building Schools for the Future, was replaced by the current government with their new approach, relying much more on direct private investment by routes outside the Private Finance Initiative, as well as some funds through the revised method of PFI known as PF2.

However, the BBC reports today that the government minister has conceded there is not enough funding for all of the schools selected for new buildings, with a shortfall of over 100 schools where no money is left. Recent similar reports by the BBC were denied.

Currently the only prospect of funding for these schools will possibly be in a few years time, and relies on other departments of government giving up some of their future capital budget to favour the Department of Education instead.

All of which bodes badly for pupils trying to learn in dilapidated schools in the years ahead, and for the UK construction industry which is still deeply in recession.


Cuts to UK councils budgets to 2016 are made worse by Whitehall departmentalism

The Local Government Association has warned today of the likely effects of announced cuts up to 2016 in non-statutory services such as museums, as well trimming mainstream budgets such as reduced street lighting after midnight.

The government, in response, has dismissed the claims as alarmist and said that local government should become more efficient, with better procurement given as an example. Really.

A bolder response by the government would be to put its money where its mouth has been on Localism. What the LGA are calling for is an end to ring-fenced budgets from central government to local government, from Whitehall to Town Hall. This is because the bulk of local government spending is in the two areas of education and social care. Councils are a people business through-and-through. But the Department of Health runs social care, and the Department of Education runs schools, and both treat local authorities merely as their local agents.

This enforced local compartmentalism causes difficulties, inefficiencies, and at times outright failures. How can troubled families be genuinely helped if some departments in Whitehall instruct ‘their’ funds not to engage?

What today’s response sadly shows is that, despite talk of Localism, the weak position of local government generally is reflected in Whitehall with the weakness of its sponsoring department for communities and local government. Sadly DCLG hasn’t the political power it needs to face down Health, Education, nor the Home Office on unpicking their ring-fenced budgets.