Should charities take over private, not public, services?

I don’t know about other countries, but in Britain it has long been a mantra of the political class that charities should, alongside private companies, take over the running of public, or state, services. Way back in 2002, under Tony Blair’s Labour government, a Treasury review declared that voluntary and community organisations had “a crucial role to play in the reform of public services”.

Fast forward to December 2014 and the new Conservative minister for charities could be heard calling for billions of pounds of public services to be transferred to the voluntary sector.  Many services have already been put in the hands of charities, from work programme contracts, to probation schemes and even prison services, though they are often playing second fiddle to corporate lead contractors.

But news that a charity, dedicated to providing affordable housing, is to take over the running of the New Era housing estate in London after an American property company, which wanted to hike up rents, caved into pressure and sold it to them, raises an interesting question. Perhaps, and not for the first time, the political establishment in Britain has got everything the wrong way round, and it is in private, not public, services, that charities have a role to play.

Consider the New Era case. An American property development company, Westbrook Partners, wanted to quadruple rents and evict families, bringing rents into line with what the market would charge for properties near to London’s financial district (New Era is in Hoxton, East London). After months of protesting by tenants, the company threw in the towel and sold out to a charity whose philosophy is to “fix rents relative to people’s incomes and not relative to market rents”.

Are you thinking what I’m thinking?

Because the plight of the New Era tenants is obviously not unique. Britain is in the midst of a housing crisis. 4 million households in England alone rent from a landlord, compared to 1.9 million in 2001. Rents have risen by 21% since 2010. They often comprise 40% of income, and renters fear eviction if they ask for repairs. Terrible conditions, including pest infestations and mould or damp are often the norm.

If ever there was a sector in dire need of reform it’s the private rented sector. And here is where charities, dedicated to setting affordable rents, providing repairs when asked to, and not leaving tenants with the threat of a two month eviction notice hanging over their heads, come in. To use the language of the great unmentionable, use value in housing needs to be reasserted at the expense of exchange value (seeing flats and houses purely as assets to be exploited) which now reigns supreme, the baleful consequences of which are plain for all to see. Housing needs to be taken out the market and charities can help do that.

What has happened in the New Era estate, the transfer of ownership from a property development company to a not for profit charity, should be replicated a thousand times across the country. More than that, public agencies, local councils or charities, should buy existing privately rented homes, and convert them to secure social housing. The £100 million at present set aside for helping charities bid for public services, could be converted to this new purpose.

Boris Johnson et al are hoping what has happened at the New Era estate is a one-off, an unavoidable climb down after a campaign that became too visible to ignore. What it needs to be is the opposite, the spark for a new movement to end the tyranny of landlordism.