Power to build 2

If the next Mayor is going to oversee a dramatic increase in the rate of housebuilding in London, they will need more than effective solutions. They will need to design an approach and strategy that brings together a coalition powerful enough to overcoming the obstacles that have so far prevented these much needed homes from being built.

That was how I ended a blog post last week on how a Labour Mayor of London could rapidly increase the rate at which new houses are built in London.

One of the ways of considering who should be in such a coalition, and how to get them on board, is to undertake a basic power analysis. To do so, we should first ask “who could most help or hinder a Mayor of  London to build new homes?”

The first organisation that springs immediately to mind is central government. On the one hand, the government gives money and powers to the Mayor, on the other hand, the government could ultimately disband the Mayor and the Greater London Authority.

This is exactly what happened when a previous Conservative Government passed the Local Government Act in 1985, disbanding the Greater London Council (GLC). Norman Tebbit famously called the GLC “Labour-dominated, high-spending and at odds with the government’s view of the world”.

We should ask ourselves the following questions about central government

  • What is that power?
  • What are their goals, demands, or vision?
  • Potential target? Who does this person listen to? Who has influence over them?

What is their power?

The government can decide on how much money the Mayor is given to build homes. They can also decide on the powers the Mayor has, for example, over planning or raising taxes.

What are their goals, demands or vision?

One of the principle aims of the government is to reduce the deficit.  A secondary, but important goal, is to increase the number and percentage of people who own their own home. Part of their vision is to build a so-called ‘Northern Powerhouse’ which includes giving more powers to the the combined Manchester Authorities.

Potential target?

George Osborne is the Chancellor of the Exchequer. As such he is supremely influential when it comes to deciding how much money the Mayor of London will be given to build new houses. He is widely credited as the main proponent of the ‘Northern Powerhouse’. In his recent budget speech he said he is “unwavering “in his “support for home ownership”.

Assessment

We now need to assess to the government’s attitude towards the agenda, shared by all Labour candidates for Mayor, of increasing the amount the number of homes being built in London. Where would we rate George Osborne on a scale from die hard support to die hard against? I would say he is somewhere in the middle.

Although he supports the idea of increasing home-ownership, he does not support the idea of affordable housing let at social rents financed by government grant. He also does not support the idea of a Labour Mayor forcing developers to build more affordable housing and probably does not support the idea of a Labour Mayor forcing Tory controlled Local Authorities to build, for example by using targets or sanctions.

Implications

What does this mean for developing a housing strategy that might actually have a realistic chance of being supported and not opposed or even vetoed by central government?

The idea that the Mayor will receive any additional money to grant finance social housing is for the birds. Similarly, the idea that the Mayor will be given powers to raise taxes or borrow more to grant finance social housing seems highly unlikely.

In fact, I would go further and suggest that a Labour Mayor who vigorously lobbied for more grant or more powers to borrow or raise taxes, would risk going the way of Ken Livingstone in the 1980s and being disbanded.

However, a strategy that was built around using part of the increased power of a devolved health budget to support the development of innovative home ownership products such as Genie might have a chance of success.

Conclusion

There are of course a number of other players at work in the world of London house building, including land owners, housing developers, residents who might oppose development, housing associations, town planners, local councillors, to name a few.

A proper housing strategy would analyse each of these groups in turn, in the way I have done here and assess the extent that these groups can either be overcome or brought into alliance.

A Labour Mayor of London who wants to oversee a dramatic increase in the rate of house building needs to ensure that they are supported by and not blocked by the government. Appeal to the Chancellor’s support for home ownership and devolution, rather than calling for more tax raising powers or imposing more conditions on house builders, seems like the strategy with the best chance of success.

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