Glasgow Stock Transfer: Privatisation by Stealth (Long Read)

In 2003, Glasgow City Council transferred all of it's council housing stock to housing associations, eviscerating public housing and clearing a path for mass privatisation and demolition in the name of democratisation and modernisation.

Housing stock transfer from council housing to housing associations began in the late 1980s in the UK. It gathered pace and scale on the back of the Decent Homes programme launched by New Labour in 2000, which involved a very minimum decent homes standard for council housing and was explicitly linked to a privatisation agenda. Local authorities in the UK would only be given the necessary funding if they chose one of three options: (1) Large Scale Voluntary Transfer (LSVT) from council housing to Housing Associations, or ‘stock transfer’; (2) transfer of council housing to arms-length management companies (ALMOs); (3) contracting out to PFI programmes. Only the first option of stock transfer was applied in Scotland; the latter two (ALMOs and PFI schemes) have been instrumental in the declining building and safety standards in council housing that led to the ‘social murder’ involved in the Grenfell housing disaster—as well as other fires and deaths in council housing that should have acted as a forewarning for Grenfell, but did not. By ‘social murder’ we draw on Friedrich Engels’s term for unnecessary deaths due to unregulated and unsafe conditions in the workplace, but here applied to unregulated housing conditions. 

Since 1979, a staggering 4.5 million council homes have been lost to privatisation and demolition, declining from 32 per cent of UK total housing stock to under 8 per cent in 2018. The Right-to-Buy (RTB) policy, introduced in 1980 by the Conservative Thatcher-led government, led to the massively subsidised sale of 2.5 million council homes. Stock transfer has been responsible for the loss of another 1.4 million homes. The rest have been demolished. Now, a key date for the timeline. On Friday 5 April 2002, a decision was made to transfer Glasgow’s entire council housing stock of 81,000 homes out of public ownership and into the hands of the specially-created ‘social’ landlord Glasgow Housing Association Limited via housing stock transfer. This followed a ballot of affected tenants, notably the right of a ballot was won by tenant campaigning previously in relation to stock transfer, where 29,000 households (out of 83,000) voted ‘yes’ to transfer on a turnout of 64% after a skewed and bitterly contested campaign. The transfer was the largest in the UK and was described at the time as ‘likely the largest public sector modernisation project in Europe.’ For modernisation, read privatisation. 

Stock transfer left Glasgow—the ‘shock city’ of the modernist housing revolution—with precisely zero public housing by the early 21st century. Considering that only two decades previously, in 1981, fully 63.2% of the city’s population lived in council homes, stock transfer has entailed a fundamental change in Glasgow’s housing tenure and culture. Yet, Friday 5 April 2002 is not a date etched into popular memory in any meaningful way. When compared to, say, the post-war destruction of Glasgow’s working-class tenement communities, there has been no flood of books, memoirs, songs, or poetry commemorating, contesting, or even celebrating this fundamental altering of household tenure and the urban fabric of the city. At the level of politics, the process of privatisation has been presented as a natural branch of progress, beyond the reach of critical discourse or critique; a rational choice under the auspices of an omniscient market. Even the left has not sustained a serious defence of, or demand for, public housing in Scotland. 

Stock transfer in Glasgow, like other cities in the UK but more so, entailed the mobilisation of very significant financial, political and media resources to force through the process. The UK Treasury stated in 2001 that it would write off the city’s historic £900m housing debt, and provide additional money for investment, if stock transfer was successfully undertaken. The Scottish Executive also proposed a loan of £400m for the successor landlord, the Glasgow Housing Association, to be repaid over ten years. Ownership of the housing stock would be purportedly disaggregated to 62 relatively small, community-based Housing Associations through second-stage transfer, with Glasgow tenants’ becoming majority members on their boards, although not that of the GHA. In the end, secondary transfer was very belated and far more minimal than initially projected. A huge programme of repairs was to be pursued, alongside demolition of the worst stock (11,000 units in the initial projections, rising to around 20,000 to this day), and the construction of new-build houses (around 6,000–10,000, though the figures have fallen well short of that target). If stock transfer was rejected, then poor quality housing, low levels of service, and no investment in municipal housing was the ‘alternative’. Essentially, the vote was massively rigged: YES for investment; NO to remain in under-maintained homes, rising rents and no investment.  A fundamental attack on a major pillar of the social contract—that the state should provide safe, affordable housing to its population in the context of a capitalist housing sector unwilling or unable to do so—was presented as its opposite.

In response, the Glasgow Anti-Stock Transfer campaign—established by local tenants and campaigners, with support from Defend Council Housing—fought to expose the process for what it was: privatisation on a massive scale. Far from being the most ‘rational’ option, stock transfer represented a far more expensive programme than its alternative: direct public investment in council housing. The new debt incurred by the GHA was higher than the historic one written off and could only be paid through higher rents or increased housing benefit payments. Transfer or no transfer rents would rise either way. Theoretically accountable public bodies such as the council and housing departments would be replaced by essentially private ones. Despite their not-for-profit status, the GHA and other Housing Associations would be subject to the discipline of the market, the lenders, banks and moneymen providing the loans, who expected returns on their investment. 

Tenants hand-picked to sit on the management boards of HA’s were legally responsible to represent those boards themselves, not the independent interests of tenants, whose fighting bodies were either incorporated or side-lined. [1] This redefined the very concept of the council tenant, and was a key part of neoliberal ideology: it ‘transformed him or her into a ‘rational consumer, albeit a consumer with little or no choice but as someone who will play a greater role in the management of their housing and of their community. Reforming the public sector is also about reforming the public, remaking the community as a self-regulating body, who consume ‘publicly’ provided, if not publicly owned, services.’ [2] The promises and panaceas of stock transfer would soon dissipate under the realities of a city being remade in the image of capitalist urbanisation; profit, not the interests of Glasgow tenants, would decide.

The ‘stock transfer war’ was fought in the run up to the ballot in April 2002. The very concept that only the affected tenants should have the right to decide on whether or not a public asset was taken out of public ownership is questionable. As James Kelman commented in relation to the Scottish steel industry, ‘jobs are not the property of individual people. If jobs can be said to belong anywhere it is to the community at large…a job is something other folk can have as well as yourself. When somebody leaves or retires, somebody else takes over. A job isn’t a “thing” to be bought and sold.’ By accepting the concept of redundancy payments, the ‘Labour Movement accepted a straightforward Tory principle.’ [3] Similarly with housing. By accepting stock transfer, the homes would be lost from public ownership not just for current tenants, but all future ones as well.

Nevertheless, under the mantra of ‘let the tenants decide’, Glasgow City Council and the GHA spent upwards of £13 million of public money on propaganda to ensure the right result was achieved. Glossy magazines and a video were sent to every tenant promoting the wonder of stock transfer. Pages upon pages of the Evening Times and other mouthpieces of the local Labour establishment were given over to pushing through a ‘yes’ vote. ‘Tenant participation’ was heralded by GCC and the Scottish Executive as central to the process, with Neighbourhood Forums and focus groups established to ensure it was all ‘tenant led.’ 

The reality was exposed by community campaigners. Fundamentally, there was no involvement whatsoever from either tenants or the public sector trade unions in the preparation of the transfer proposals which were to be put to the vote. The financial prospectus sent by the GHA to major financial institutions to secure £700m in loans was never made available to tenant groups. Internal guidance documents stated that the hand-picked Neighbourhood Forums were to be used as a means of getting tenants to ‘come on board’ with the process. Meanwhile, the power of democratic tenant bodies such as the Glasgow Council of Tenants Associations were consistently stripped away, and oppositional tenants ignored or marginalised. Neither the SNP or trade unions such as UNISON and the GMB mounted any significant opposition to the plans. In contrast to the millions spent on the ‘yes’ campaign, ‘no’ campaigners operated on a budget of a few thousand pounds, putting in the hard leg work across the city’s schemes and up and down its high rises. In the end it is remarkable that the yes vote in Glasgow was so narrowly won given these circumstances: 58 per cent YES, 42 per cent NO.

The long hollowing-out of the council tenant as a political subject, together with the structures of organised tenant action, has been accelerated by privatisation and stock transfer. Yet stock transfer in Glasgow was contested, and the warnings and lessons of campaigners, as well as the obfuscations and manipulations of those who led the process, not least through the false-friend deployment of terms like ‘community empowerment’, ‘participation’, and ‘neighbourhood transformation’, are crucial for understanding where we are now, and what we are fighting for.

Across the UK, the way stock transfer ballots proceeded was similar. Vote yes for debt write-off and investment; vote no to retain council housing but with no investment, rising rents and cuts to maintenance budgets. Despite this Hobson’s choice, stock transfer was rejected by many tenants in local authorities across the UK. Notably, negative tenant experiences with stock transfer in Glasgow were picked up on by anti-stock transfer campaigners across Scotland. Tenants from Edinburgh, Stirling, Renfrewshire, West Dunbartonshire and the Highlands all rejected stock transfer. Aberdeen and Dundee had already rejected it at the pre-ballot stage. In this sense, the NO campaign in Glasgow was not entirely defeated in its objectives, since it exposed the gaping chasm between promise and reality that gave life to other successful NO campaigns in Scotland.  In Edinburgh alone, one of us was involved in a campaign that, alongside individual tenant votes, prevented 23,000 homes from being stock transferred.  

In the end what has stock transfer meant? And what other dates in the timeline did it generate? As Norman Ginsburg observes, stock transfer since 2000 produced a large number of major ‘low value’ asset transfers in which the average price paid has been very low. Stock transfer in Glasgow worked out at a staggering sale price of £310 per council house—the lowest value transfer per house in the UK. The Treasury’s agreement to cancelling the debt if stock transfer proceeded amounted to £909 million in Glasgow, which was effectively an enormous subsidy for GHA to become the owner of the largest public housing stock in the UK. [4] Again, it is important here to stress that Glasgow was only an extreme version of a widespread phenomenon across the UK, involving around 400 attempted local authority stock transfers and around 100 NO votes. 

At the time of the transfer, Glasgow City Council had 83,000 fully public council homes. By 2017-2018 GHA reported only 39,000 ‘affordable’ homes on their books. This is a hugely significant loss of homes in only 15 years that has entailed the large-scale demolition of council housing in numerous areas across the city: Dalmarnock, Gallowgate, Ibrox, Anderston, Maryhill, Castlemilk, Sighthill, Red Road, the Gorbals, Toryglen and Pollokshaws to name just a few areas. The Transformational Regeneration Area scheme, or TRA programme led by GHA, includes several of these areas. In total, the programme will demolish 11,000 former council homes to be replaced by only 600 social rented homes and 6,500 homes for sale or mid-marker rent. Effectively, this one programme alone will be responsible for the erasure of 10,400 former council homes in the city. The programme was established in 2007 but the process is a slow one of attrition that has not been marked in any historic timeline of benchmark city events. One date we can more easily locate is Wednesday July 23, 2014. On this date, which marked the opening ceremony for the 2014 Commonwealth Games, there was an obscene plan to live-stream the mass demolition of five remaining high-rise blocks at Barmulloch, or the Red Road flats, once the site of the tallest high-rise buildings in Europe and a major symbol of Glasgow’s modernist housing revolution. This, apparently, would symbolise Glasgow City Council’s restless ability to ‘regenerate, renew and re-invent itself’. As Gordon Matheson, City Council leader at the time, said: 

We are going to wow the world, with the demolition of the Red Road flats set to play a starring role. Their demolition will all but mark the end of high-rise living in the area and is symbolic of the changing face of Glasgow, not least in terms of our preparations for the Games”.

Of course, local residents did not see this plan in such euphoric terms and a viral campaign soon showed up the insanity and insensitivity of blowing up people’s home as virtuoso spectacle. In the end the plans were dropped but what can clearly be said is that they were not exceptional in any way—instead, they only made visible the obscene underside of Glasgow’s regeneration plans.  What does all this mean for Glasgow residents? The results of stock transfer are still playing out in the city today: mass demolition of high-rise social housing, rapidly rising rents in both the social and private rented sectors (the latter growing from 5% to 20% of the housing stock in the last decade), escalating house process, increasing homelessness, and the stealthy financialisation of the Housing Associations which took over previously public assets. All this has meant a big rise in the cost of living for everyone in Glasgow and a serious disproportionate rise in the part of the wage dedicated to housing costs. 

But we can also add some other more hopeful dates here. In 2014, Scottish Living Rent was established as a tenant organisation. And in 2016, a Glasgow branch was formed and Living Rent became Living Rent Tenants’ Union. Understanding that tenants cannot rely on the private market, local authorities or Housing Associations to resolve the housing crisis, Living Rent is an independent union made up of tenants acting on behalf of tenants. This includes member defence in the form of securing repairs, maintenance and challenging unlawful deposits and fees; campaigns for rent control and secure tenancies and against illegal fees and no-fault evictions; and campaigns against the mass evictions of asylum seekers and for public housing. All these work towards de-commodifying housing and also re-politicising housing at a local level, especially through the development of a network of neighbourhood branches.   Feel free to join!

Delivered as a talk by Living Rent members Neil Gray and Joey Simons at the CCA, Glasgow, August 10, 2019.

Sources

[1] See City Strolls, ‘Social Housing Privatisation,’ Variant 24

[2] Mooney, Gerry and Poole, Lynn (2005). Marginalised voices: resisting the privatisation of council housing in Glasgow. Local Economy, 20(1) pp. 27–39.

[3] James Kelman, ‘Fighting for Survival: the Steel Industry in Scotland’ (1990). “And the judges said…Essays” (2008).

[4] Norman Ginsburg, 2005, The privatisation of council housing. Critical Social Policy, Vol. 25(1): 124.