The great British land sell

Austerity and neoliberal policy-making has led to the loss of some of our greatest assets and restricted the potential for social housing. Samir Jeraj explores how this has happened and ideas of how to stop it

October 15, 2019 · 12 min read
March against the Haringey Development Vehicle, Haringey Council’s now abandoned plan for a deal with private developer Lendlease. Photo by Alan Stanton, under a CC BY-SA 2.0 license

To understand more about how a society works, you just need to look to the land. It is the most strategic resource we have and how it’s used, and owned, impacts on our ability to build a well-functioning, healthy and equal society.

Over the past four decades, under neoliberal economic thinking, the British state has privatised large parts of the economy and public sector. But the biggest sell off, in value and size, is of land owned by the government and nominally for the public good.

National and local government in the UK started buying land on a large scale in the 19th century, initially for building railways. Drives to clear slums and build decent housing to improve the health of the working class added to the portfolio, as did efforts in the 1930s to buy up farm land to help tenant farmers during the depression.

In 1979 around 20 per cent of land was owned by the public sector, with a view to providing what were considered important functions of the state: hospitals, housing, prisons and military bases. By 2019 that had fallen to 10 per cent, with little evidence that selling the land has made life better. The past decade has seen increasing amounts of land sold off by central and local government, as well as the NHS.

Growth in interest

Laurie Macfarlane is an economist who recently co-authored the independent Land for the Many report to the Labour Party and the book Rethinking the Economics of Land and Housing. He is encouraged by the growth in interest in the issue of land, the number of reports from NGOs and serious moves from across the political spectrum.

‘When our book came out [in 2016], land was still a bit obscure. It wasn’t something that many people were necessarily talking about,’ he says. By 2017, even the Tories’ election manifesto said they would look at changing the rules on compensation for the compulsory purchase of land – although they’ve not done anything about it since.

One positive development, according to Macfarlane, has been lifting the cap on borrowing by local government to build housing. In 2016, however, the rules on how local councils could spend the proceeds of land sales were changed. They were now permitted to use them to plug holes in their revenue budgets, rather than being required to invest in other assets such as buying new buildings or renovating old ones to bring them back into use, or improving parks and play areas. This has contributed to a surge in sales of publicly-owned land by hard-pressed local authorities desperate to maintain essential services.

Work by the Bureau of Investigative Journalism in 2019 found that over 12,000 public spaces had been sold in the previous five years, bringing in £9.1 billion. One in six councils used that money to plug the gap left by budget cuts, with £115 million being spent just to cover redundancy costs. These sell-offs included buildings that provided vital services, such as care homes, day centres and libraries.

NHS trusts, which oversee the building and maintenance of hospitals and other health services, have also had to sell land in the face of budget crises. Nearly half of England’s 234 NHS trusts are in deficit. As well as balancing the books, the land sales are a key part of the government’s drive to sell public land for housing.

However, work by the New Economics Foundation (NEF) has found that little of the housing being built on former NHS land could be afforded by hospital staff. Nurses will effectively be unable to afford any of the homes built for sale, and only 5 per cent of housing built on NHS land sold in 2017-18, for instance, will be for social rent. In most areas, homes let at so-called ‘affordable’ rents will also be out of reach: while social rents are affordable in relation to local incomes, ‘affordable’ rents can be set at up to 80 per cent of the market rate under the government’s definition.

NHS trusts are selling off land in the face of budget crises. Photo by secretlondon123 under a CC BY-SA 2.0 license

Opaque and unaccountable

Hanna Wheatley works for NEF, looking at public land sales under the coalition government through to the current programme of land sales. Ostensibly the sale of land is meant to be about releasing land to build housing, but the system of selling land and what happens to the money generated is confusing, opaque and unaccountable.

‘It’s a nightmare trying to get to grips with how it all works, because there are so many different bodies involved in it,’ says Wheatley. It’s also a short-term policy, she adds, as decent and affordable housing helps keep people healthy, thereby reducing costs for the NHS. Despite this, in the nearly ten years that the land sale policy has been in place, there has been very little thought or discussion about affordable housing: ‘The whole thing is a shambles.’

The privatisation of former military bases dwarfs both council and NHS land sales. In several cases, the new owners of former bases have sold them on in parts with planning permission for a quick profit without having built a single home. One military site in Bath was sold to a developer for £12.5 million in 2013, only to be sold on again for £29 million just three years later.

In some communities, people have successfully resisted the privatisation of land. Early in the Conservative/Lib Dem coalition government of 2010-15, an attempt to sell off the UK’s forests was defeated. And some of the most important battles have been fought at the most local level and in some of the most marginalised communities. Last year, Labour-run Knowsley Council abandoned plans to sell off 17 public parks following public opposition. The council had claimed that the sales would allow them to fund a trust that would look after the remaining parks.

In Liverpool, local residents have fought successive attempts to privatise and gentrify neighbourhoods. For many years now, local and national government have tried to revive the housing market in parts of the city by demolishing the old streets and encouraging luxury developments. One area in particular has seen the worst of this but been able to resist the onslaught.

Granby Four Streets

Hazel Tilley is one of the organisers of Granby Four Streets, a community land trust set up to preserve and regenerate a number of streets in the city. For years the area had been denigrated for being working class and multi-cultural. ‘We were bollarded off and we were ghettoised,’ Tilley explains. She feels racist attitudes towards the area led to these policies, which culminated in everyone receiving compulsory purchase notices for their homes to be bought up, demolished and replaced with posher housing.

Community activists formed a residents’ association, which was succeeded by Granby Four Streets, and managed to save the four streets where most remaining residents were living. Other residents took a lead in cleaning up and gardening in the streets, getting funding from local trusts to improve the look of the area and turn around the neglect. ‘Nobody cared for the street apart from us,’ Hazel Tilley says. One of the other things the residents started to do to reclaim the streets was establishing a street market.

By 2010, the new government decided to scrap the demolition programme and it meant the residents could pull together a group to think about the long-term future of the streets. The profile generated by their previous work meant they could pull in offers of support and advice, which eventually secured a £500,000 loan and a £500,000 grant for the newly-established community land trust to start renovating some of the empty homes and bringing them back into use. They worked with a group of young and radical architects on designs for the homes.

‘I don’t think any of us realised how big a task we had taken on,’ Tilley says. ‘It’s a nice area to be in. It’s near to the mosque, there’s an African church, there’s a Hindu temple and the two cathedrals all within ten or 20 minutes,’ she explains. ‘I think it is really important that everybody feels at home and safe,’ she adds. The group used the social housing sector as a guide to setting rents but had to sell some houses to repay the loans – however, they put a covenant on these homes so that the selling price is tied to the median local income.

St Ann’s Redevelopment Trust

Seb Klier is an activist with StART (the St Ann’s Redevelopment Trust). ‘StART was originally a campaign,’ he explains. Two-thirds of the St Ann’s hospital site in South Tottenham was earmarked for development, with just 13 per cent ‘affordable’ housing. ‘My personal motivations were about affordable housing,’ he says. ‘There is a real need for much more genuinely affordable housing.’

A residents’ campaign joined up with a local co-operative, which had been looking for land to expand, people concerned with the green space and others who wanted to keep a health legacy. ‘There were lots of ideas around,’ says Klier. ‘It became clear that something more like a community land trust would be a good way to bring it together.’

StART raised £25,000, mainly through crowdfunding, to fund the development of outline plans for the site, so they can present their alternative vision to people and talk with them about what they think should happen. The fact that this is about a community campaigning about a specific site gives it a broader appeal locally and means a wider demographic of people are involved. ‘You go beyond the usual campaigners and bring in new perspectives and new skills,’ explains Klier.

The group is hoping to build 800 homes, which would be the largest development by a community land trust in the UK. Their stated aim is to ensure the maximum number of these should be permanently affordable.

The group convinced the London Assembly to buy the site, overcoming one of the biggest barriers faced by community-led housing groups, but the Assembly is much less ambitious than StART, favouring a smaller number of community-controlled homes and including shared ownership as part of the affordable housing.

StART is continuing to lobby, influence and work to change this and bring as much of the areas into community control as possible.

Changed relationship

Ultimately, we need to change our relationship with land. Providing good and affordable housing, not luxury penthouses; renewable energy, not fracking sites; and public transport, walking and cycling, rather than polluting cars.

Victories such as those described above are rare – and compared to the scale of privatisation they are small. However, they do illustrate how things could be and how we could move towards a better society in which land and power are placed in the hands of the community.

With the greater attention being paid to the issue of land has come a set of ideas and policies that could transform that relationship on a much grander scale.

A land value tax is an idea that has been around for centuries, and is in place in Singapore, New Zealand and even, historically, parts of the US. Land is easy to tax because it can’t easily be hidden or moved. Taxing it on its value is a good way to capture the rise in value when the state makes improvements that make an area more desirable to live or work, such as a new railway line. A land value tax is also a good way to incentivise how land is used, charging higher taxes on luxury development and lower taxes on social housing.

A People’s Land Bank is another idea that has been put forward by the New Economics Foundation. This would create a public body responsible for buying, preparing and bringing forward enough land to meet housing demand, with a focus on social and affordable housing. Laurie Macfarlane was one of those who came up with the original proposal. This means that we could ‘stop relying on the private developers who are operating on a speculative model’, he says.

Other organisations, such as the public services campaign group We Own It, have called for a duty to ‘steward and protect public assets and land’, which would mean no public sector asset could be sold unless it is in order to buy an asset of equal value. Convenor Cat Hobbs says: ‘It is always short-sighted. It might look like surplus land right now, but what about the future hospital beds that will be needed?’

In combination, these policies could dramatically change how land is used in the UK and help to establish the basis for a more equal and sustainable society.

Samir Jeraj is a freelance journalist based in London. He specialises in housing, social affairs, politics, development and local government.

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