‘Right to Buy should be abolished,’ says Islington’s finance chief

To say councils up and down the country are feeling the pinch would be a colossal understatement.

Ahead of last year’s election, the Institute for Fiscal Studies (IFS) laid bare the impact of austerity on local government budgets, with some services having seen real-terms funding cuts of between 40 and 70 per cent.

Dire cases have resulted in councils like Birmingham going bankrupt, while the rising number of local authorities seeking emergency support from the government has stirred anxieties.

In October, one in four chief executives surveyed by the Local Government Association (LGA) said their councils were likely to need bailing out in the next two financial years.

Islington’s finance chief, Cllr Diarmaid Ward, tells me that for his borough alone sweeping cuts have amounted to a total of £300 million lost since 2010.

Even as he and his colleagues welcome the election of a Labour government, Islington’s messaging on the state of its finances runs parallel to Keir Starmer’s administration: patience.

There may be no “overnight” fix, Ward says, but he is eager to assure residents that the Labour-run council has been lobbying the government for more protection and adequate funding.

Following Labour’s “loveless landslide”, as many have dubbed it, Downing Street has sought to define a clear pitch to the country over how it plans to fix not just one but several crises — in adult social care, the NHS, housing, prisons — amid anaemic economic growth.

In December, the Prime Minister outlined six milestones to measure his administration against, atop its ‘five missions’ for government announced in February 2023.

The Town Hall, meanwhile, has its own five bespoke missions to create “a more equal future” by 2030, which include ‘Community Wealth Building’ to tackle economic inequality, and ensuring all residents have a “safe, decent and genuinely affordable place to call home” by the end of this decade. These, says Cllr Ward, underpin the latest budget proposals.

But the plans point to almost £44 million worth in service cuts over the coming years, alongside a 4.99 per cent hike in council tax.

On this “incredibly difficult choice,” Ward is reluctant but firm that the Town Hall was left with few other options.

“The biggest thing about this budget is the five missions, and keeping those frontline services going. That’s a hard choice, but on balance it’s the choice to make [to ensure they do].

“There’s still a cost-of-living crisis, and people are struggling, and I do think that the rise in council tax has to be seen in conjunction with us protecting our support scheme. We now have 8,000 working age families getting 100 per cent support, and another 8,000 with 95 per cent support.”

Part of the hike includes the adult social care precept, an additional charge introduced nationwide by the Tories in 2016, allowing councils who provide the service to increase their share of council tax.

Last week, a national survey revealed that Islington service users were less satisfied with the social care they receive than the London average. Cllr Ward was clear that the issue is a “time bomb”, and said the government’s plans “cannot come soon enough”.

But despite the goverment’s commitment to build a National Care Service, critics say the recent decision to hold yet another review — this time chaired by crossbench peer Louise Casey — is an exercise in can-kicking.

Ward declines to wade in, but instead underlines the desperate situation the country faces. “Something’s got to give,” he warns.

Having previously worked as a solicitor, Ward joined the council representing Holloway in 2014.

Before becoming deputy leader and executive member for finance and performance in 2022, he spent six years with the housing and development brief.

During that time he and others pushed for the former Holloway Prison site to be repurposed as affordable housing for the borough’s residents, a campaign recently brought up in a spat between the Labour executive and its Green opposition after the latter urged the council to “get on with” housebuilding.

Last March, the council was forced to scrap seven schemes and a planned estate block from its homebuilding programme, amid what it deemed “intense cost pressures and significant risks”.

But Ward’s successor in housing, Cllr John Woolf, last week sought to rebuke the Greens’ attacks.

Pointing to seven major projects in the works, he lambasted “active resistance” from one Green candidate over the Holloway Prison development, even as he acknowledged that building “genuinely affordable homes” was harder than ever.

“The opposition have voted against our budget for the last three years in a row — against new council housing, against homelessness support,” Ward says. “It’s very easy to criticise from the sidelines.

“The reality is, we’ve had 14 years of Tory austerity in Islington, and that’s not something that can be addressed overnight. The Labour government’s [only] been around for a few months.”

But he is frank about the painful shortage of social housing and the long-term roots of the crisis, which some argue began with the introduction of Right-to-Buy in 1980.

The government has now started to change the rules to make it harder for tenants to buy council homes, alongside planning reforms, in a bid to build £1.5 million homes come the next election to “save the dream of home ownership”.

But in Ward’s view, more action is needed: “Building council housing is in [Islington’s] DNA. But despite the changes made to Right-to-Buy receipts, the cost of construction has gone through the roof. I would argue that in Islington, planning is not the problem — it’s pounds, shillings and pence.

“I would like to see the Right-to-Buy abolished altogether. But I do accept that these limitations are really positive steps. It’ll take time to bed in, but certainly in the long term it will have a positive effect in the borough.”

Does he think the government will bring to an end one of Margaret Thatcher’s most controversial policies?

“I’ll keep asking,” he replies.

In recent years, the Town Hall has had its own record on housing thrashed.

In 2023, the social housing ombudsman slated its approach to complaints and said “empowering staff” was key to improvement.

“We’ve learned an awful lot of lessons,” Ward says, even as the council’s proposed cuts include paring down its back-office workforce.

I ask him if this push for greater “efficiencies” could end up overburdening council employees and risk hindering the strides made in the Town Hall’s housing services.

“Is that a risk? Yes, absolutely. It’s something we will have to look at very, very carefully over the next few years,” Ward says, acknowledging that achieving this balance will be “very ambitious”.

But he is keen to hammer home that the council is doing “everything it can to protect frontline services”.

He also trusts that a healthy grilling from the council’s corporate resources and economy scrutiny committee will keep these new “efficiencies” in check.

“I don’t get an easy time [there]. Every single aspect, every saving that we’ve done over the past few years, gets pulled over.”

As he enters his third year as finance lead, he says the promise of a multi-year settlement for local government is heartening — even if it won’t be due until next year.

Many authorities are wary that this wait is still too long to calm nerves around funding.

Late last year, London Councils warned that the capital was still facing a £500 million shortfall, despite Deputy Prime Minister Angela Rayner announcing a near £80 million year-on-year boost to tackle temporary accommodation.

Ward himself is slightly irked by how the government’s £600 million ‘recovery grant’ was allocated: “It does feel as if London could have done a little bit better.”

But progress is being made on homelessness, he insists, as the council outlines an extra £200 million investment in support and prevention.

“It will mean that we can get people into temporary accommodation, despite rents soaring through the roof, it’ll mean that we can keep providing help and advice to people.

“We’re also buying those temporary accommodations, as we’ve got a program of buying back former Right-to-Buy homes which are in borough, on our estates, which immediately brings the spend right down.

“There’s no easy solution to it, but we have several different weapons in our armoury. But it is a huge pressure.”