Lesley Riddoch - SNP council homes plan needs renovation to be safe as houses

ALEX Salmond's legendary assessment of form didn't pay off at the Scottish Grand National on Saturday, when his favoured nag failed to win.

Clearly, the First Minister's reserves of energy and intuition are being fully absorbed by the chess-board of Scottish politics. John Swinney's local authority love-in had already put Labour into check. Now Nicola Sturgeon appears to have achieved checkmate by occupying the policy position Labour cannot oppose – the resurrection of the council house and the scrapping of Margaret Thatcher's right-to-buy.

Some 25 million will liberate a similar amount through increased council borrowing to create 300-400 homes over the next three years. A propaganda coup, but a practical drop in the ocean compared with the target of an annual 35,000 new homes the SNP intends to hit "some time next decade". It's not a lot, either, in the face of government predictions that Scotland faces economic stagnation unless it builds 50 per cent more houses until 2016. That's an extra 10,000 a year – a total that won't be achieved this year.

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And it's hardly a squeak compared with the 190,000 council house "starts" begun 80 years ago by John Wheatley, the Labour housing minister whose memory was invoked by Ms Sturgeon addressing a packed and rapturous hall of delegates at the SNP's spring conference in Edinburgh.

By comparison, 350 SNP council homes between 32 councils hardly deserve a weak cheer. But then, in the public mind, the comparison is not with the halcyon days of Very Old Labour. It is with the recent performance of Very New Labour. And over the past four years Labour presided over the construction of just six new Scottish council homes.

Reclaiming the council house has allowed the SNP to approach the display cabinet of Old Labour and walk off with one of its most significant bits of silverware.

And who can complain?

Not the party that so relied on the automatic support of Scottish council tenants that it couldn't end Margaret Thatcher's right-to-buy policy when it gained power in 1997, even though that continued right-to-buy has destroyed council housing.

Council housing may have restricted mobility, and may latterly have been system-built to create low-quality, large, impersonal ghettos – but it still has political and emotional pulling power in Scotland.

Perhaps the strongest symbol of working-class Britain, council housing was supported last century by all parties until the advent of Margaret Thatcher. She believed it was a bulwark of the dependency economy, and her actions changed the country's housing profile for ever. In Thatcher's days the proportion of tenants to owners was 70-30. Today that proportion is precisely reversed.

So New Labour chose not to build more council homes. Quite the opposite. With its stock transfer policy, Labour has tried to coax tenants away from their old council landlords. And it is penalising those formerly Labour councils whose Labour-voting tenants opted to stay put. Thus any extra council house-building cash given to Renfrewshire, the Highlands, Edinburgh and Stirling will be swallowed up servicing the housing debt they're saddled with for ever – by keeping their council house tenants. All courtesy of Gordon Brown. You couldn't make it up.

Meanwhile, thanks to the Scottish housing minister in 2001 – Wendy Alexander – buyouts on housing association homes will begin around 2011, which has affected that sector's enthusiasm for building homes.

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But never mind the past. Is council housing the best policy for Scotland's future?

This 25 million is now extra cash. So why has it effectively been taken from the 800 million budget of the housing association (HA) movement?

It seems the SNP is worried that Labour poured ever more cash into the HA movement, but the cost per unit has risen by 70 per cent while numbers completed have fallen.

So the SNP has made a sizeable cut in the HA grant allocation, suggested private funds could make up the shortfall and hinted that mergers would create bigger organisations and economies of scale.

Perhaps. But house prices have risen in large part because of the ninefold rise in the cost of land, as well as the delays that follow as land speculators wait for values to rise further and councils struggle to process new building projects because of objections and a lack of planning staff.

Surely, some joint-working could end this log-jam. Councils have access to land. Housing associations have building and management expertise. Together they can turn the council house cash into quality homes.

This would leave the SNP free to dismantle the other Rubicon Labour would not cross – the "best value" rule, whereby public bodies cannot transfer land to each other or the community without achieving the best price.

The existing system of house-building doesn't work and the SNP's reversion to municipal housing doesn't get around that fact.

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The end of right-to-buy will be welcomed by every housing professional. But many will suspect the resurrection of council housing has a lot to do with keeping local authorities sweet while the SNP attempts to introduce the local income tax, and little to do with a housing crisis that could yet swallow the SNP as surely as escalating council tax charges helped swallow Labour.