Sounds barmy doesn't it. But Nottingham city council have identified nearly 1000, and Birmingham over 1200 homes that they have lined up for demolition. If all councils demolish at the same rate it will mean 60,000 affordable homes are to be demolished across England, with only vague plans that some of them will ever be replaced.
Perhaps even more scandalously it turns out that most of these homes are occupied. The tenants will be evicted and presumabaly put into temporary accommodation.
What could possibly justify this huge upheaval of people and such a big loss of affordable homes? The shocking answer is - accounting reasons!
The government has decided to allocate it's own housing debt to councils as part of the scrapping of the HRA subsidy system. Essentially all councils with council homes take a pro-rata share of the government's £23billion housing debt in exchange for keeping rental income on their housing stock. The driver for this was partly councils' unhappiness with the current system, but surely also a desire from Treasury to remove a huge debt off the public deficit.
The unintended consequence is that councils are seeking to avoid the debt by demolishing houses. Each council house they own will attract around £12,000 of debt.Get rid of a 1000 houses and you avoid £12m debt.
Housing minister Grant Shapps was on You and Yours on Radio 4 with me yesterday sounding reassuring. Although he didn't deny that councils will demolish homes to avoid debt, he said that there was unlikely to be an overall increase in demolitions from this measure. Hmmm... I'm not convinced. This looks like the policy people missed the consequence of thier policy. I don't like Nottingham and Birmingham's oppurtunism and cynicism, but have no doubt who is really repsonsible for this disastrous policy. Treasury.