Wednesday 24 September 2008

Maggie, Maggie, Maggie!

The Barnet Times recently ran an article which set the alarm bells ringing. Fortunately, an extremely helpful officer from Barnet Homes was able to put the record straight and bring down my blood pressure!

Under the headline “Measures introduced to help (the) hard up” the article referred to council schemes to help residents suffering from the credit crunch. It also mentioned that grants of £29,000 were available for people to buy their council homes.

My initial reaction was to wonder how on earth giving tax payer’s money to council tenants could help Barnet residents suffering from the current economic depression.

It turns out that the credit crunch help measures and the housing grants were two separate issues which somehow appeared as one article in the paper.

But this still left another question unanswered. Why was the council making grants available for tenants to buy their homes when they were already entitled to discounts under the Right To Buy scheme? Again, the newspaper article gave a slightly misleading impression. The council officer explained that the Cash Incentive Scheme (or CIS as it is known) is a distinctly separate scheme from Right To Buy. Under CIS, a grant is paid to tenants to move out of council housing into private accommodation, thereby releasing their property for another family. You can’t apply for a discount and a grant!

But then came the real shocker. Apparently, CIS has been operating in Barnet for nearly 20 years which means that it was Margaret Thatcher’s government which brought in the legislation that allows hard working taxpayers to subsidise council tenants buying their own homes. Who would have ever thought this possible from the woman once dubbed the milk snatcher!

So if CIS has been around for 20 years, why is it being publicised now? Has the council taken a leaf out of Labour’s book and decided that re-announcing an old decision will divert attention away from the TV scandal? Or the laptop scandal? Or the bridge scandal?

But there is a far more important issue to consider than the work of the council’s spin doctors. Is CIS fair? According to the Government’s web site “The objectives of the Cash Incentive Scheme are to release local authority accommodation for letting to those in housing need and to encourage owner occupation.”

You might agree with those objectives. But equally it could be argued that CIS only serves to create a culture of dependency by sending out the message “stay in your council house for a few years and then we will pay you to go somewhere else.” How does that encourage people to be financially responsible and save up for their own home?

By enticing tenants to move into the private sector, they are being encouraged to take on mortgages which they might not be able to afford. Is Barnet not at risk of fuelling the sub prime crisis?

The Council has set aside £600,000 for CIS this year. Last year 21 grants were awarded at an average of £26,000 each. At a similar level, we could be looking at around 23 or 24 grants this year.

In the current climate, where every penny counts, is it really appropriate to spend such a large amount of public money helping such a small number of families?

£600,000 could be used to help far greater numbers struggling to pay their council tax or heating bills. Or it could buy wide screen televisions for residential care homes. Or the council could simply not spend the money at all and give everyone a well deserved break. This is supposed to be a tax cutting administration after all.

Conservatives have criticised Gordon Brown for creating a client state economy in order to effectively buy votes. It is hard to see how CIS is different. I think you got this one wrong Maggie!

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