11 November 2011

End of the second home discount?
The Tory Libdem government’s consultative proposal to give local councils the power to remove the council tax discount for second homes is on balance right. After all, the council has to provide infrastructure and all-the-year round services.

Cornwall Council will gain £1.6 million – or will it?
I suppose Cornwall Council looks forward to gaining the extra revenue from the abolished discount, about £1.6 million. However, it is not likely to be that straightforward. Tax changes are not static but dynamic; taxpayers’ behaviour often changes when tax rates and arrangements change. For example, I expect that some second home owners will seek to legally minimise their tax by changing the status of their second home and the basis on which they pay tax on it. Thus any gain for Cornwall Council may be reduced.

Second homes
Along with the discount changes, the Tory Libdem government has been urged to give councils powers to limit the numbers of second and holiday homes but the government, like Labour before it, has dismissed those suggestions: see Hansard 31 October 2011 column 585. I think such moves on second houses are pointless; these houses are a separate issue from the provision of affordable homes and restrictions today will probably not provide a single additional affordable house for purchase; it’s a price question.

We certainly have a serious problem in Cornwall, a shortage of affordable houses for local people to rent or buy. It isn’t down only to the present reactionary government; the previous Labour government had a shameful affordable housing record as I have said before on the blog. In round terms the county housing waiting list is around 20 000 and last financial year only 700 new affordable houses of all types were completed. This is a battle we have been losing, are losing, and candidly look likely to go on losing.

I have explored affordable housing in several posts (for example here) and I am dispirited to see the blurring of focus, the trips down housing by-lanes. If we want affordable homes, there is only one effective way to provide them: build’em, build’em, build’em. That should be the focus.

I have set out in previous posts the mixed tenure and size arrangements, for example, that should apply to affordable housing. As well as those and planning and construction issues,there are three practical barriers to overcome: people, sites, and funds.

There are often successful objections from some local people to proposals for affordable houses in their patch of Cornwall whatever they may approve in theory. I have previously pointed out that localism, involving a local veto over the building of affordable homes, has undesirable aspects and I think we need a central authority removed from local nimbyism to insist on the approval of appropriate proposals for the building of affordable housing for locals.

There are few if any ideal sites left so we have to build on less than perfect sites, including some managed building on fields at the edge of towns and villages. Cue wailing; cue that rational housing authority.

Lastly, affordable houses need funding. The Tory Libdem government has cut the direct funding and developer subsidy funds, while important, are insufficient to make serious inroads into the problem. It is down to the government massively to fund affordable housing, to see that it matters enough to prioritise it.

King’s ransom
Okay, we are in a time of austerity and abundant funds for affordable housing are unlikely. However, housing should be pushed up the list of practical priorities, the things that get done not the things that get talked about. Government should be pressed and pressed on the need for funds and getting the houses built.

Nevertheless, the money needed for effect is a king’s ransom. I wouldn’t start from here but here we are.