“In the leaflet – the Haggerston Rose – Labour are claiming to have solved problems that they themselves caused,” said IWCA (Hackney Independent) activist and candidate Carl Taylor. “And they have claimed that things are getting better when all the evidence is that they are getting much, much worse.”
The leaflet claims that the £30 million secured by the council from central government has ended the threat to libraries and nurseries, that Labour were responsible for terminating the costly ITNet revenues and benefits contract and that they have brought improvements to schools, street cleaning and social services.
“The news that the threat to libraries and nurseries has been ended must be news to workers and users,” said Carl Taylor. “Each week in the Gazette we read about the ongoing libraries dispute and renewed threats to existing nursery provision. The ITNet contract was brought in by Labour in the first place and they were forced to sack them only in the face of the anger and misery of Hackney tenants. Thanks to Labour, ITNet nearly bankrupted this borough. Rather than claim credit for sacking them they should be apologising to all of us for their own incompetency. The massively overspent Service Team street cleaning contract and the Initial school meals fiasco shows that they haven’t learnt anything from ITNet. As for social services, how can anyone claim that reducing home care for the elderly and cutting Freedom Passes to the disabled are ‘real improvements’!?”
The IWCA (Hackney Independent) have also condemned labour councillors claims to have ‘worked hard to keep open the Apples & Pears Adventure Playground’. The IWCA’s Peter Sutton – another election candidate in Haggerston Ward – said “the only reason this valuable site is under threat in the first place is because Labour councillors are determined to sell off our facilities. Apples & Pears was only saved from the hammer at auction because volunteer workers and parents got a court injunction which has delayed the sale. Are Labour now saying they have no plans to sell the site, or do they intend to push the sale again after the election when it will be less electorally damaging? Whatever their plans are they should come out and say so. No wonder people are increasingly fed up with this kind of dishonest ‘politics’.”
The IWCA (Hackney Independent) believes that Labour’s claim that they will ‘continue to stick up for local people and vital community facilities’ is nothing more than a joke, and not a particularly funny one. “Labour’s record on community facilities is abysmal,” said Peter Sutton. “They have broken their promise in their last newsletter, put out over a year ago, to reopen Haggerston Pool. Why should people believe what they read in this one? We share people’s frustration at this kind of ‘economy with the truth’ and are committed to campaigning with local people to prevent more cuts and sell-offs. We will continue to do so whatever happens at the elections. Fortunately people now have a choice in Haggerston.”
In response to the three-year budget strategy provided by Hackney Council last year, central government is to give the local authority £25m to reduce the impact of the cuts. The ‘deal’ still requires £13m worth of cuts and a 10% increase in council tax. Not much of a deal for Hackney residents who will be paying more whilst simultaneously watching their public services disappear.
How to balance the budget – whatever the social cost
After an audit commission report in 1999, huge gaps in the authority’s finances were exposed and central government demand-ed changes to the running of the council. The first step it took was to prevent a single penny from being spent, by serving a Section 114, an inadequate policy which saw waste vehicles sit idol in the depot waiting for repair as rubbish piled up on the streets. The ensuing protests forced the order to be lifted, but only after the council agreed to formulate a three- year budget balancing strategy. The government paid £3.5m to accountants whose task was to go through each department’s finances looking at ways to make savings.
When the strategy was publicly aired in December last year, there was outrage – no area within reach of the council was safe as group after group and service after service faced huge reductions in their finances. Many residents most in need, the young, elderly and those from minority communities, will lose vital facilities.
The budget strategy requires the government to give Hackney £54m over 3 years. However, it has now been made clear the only one year’s worth of extra funding will be offered. Will the future see even worse cuts imposed than those already outlined in the 3 year budget?
Drop the Debt!
The Government may wish to shift all the blame onto Hackney Council but a major part of the problem is the massive debt repayments the Council has to make to the Government – nearly £75 million each year. If it did not have to pay this it would not have to take the short-sighted step of selling off its family silver, in the form of buildings and land. The facilities that occupy these, such as libraries and play-grounds, are under constant threat of disappearing. The District Auditor has warned that property disposal ‘is not a sustainable medium-term strategy’ while, at the same time, asking for ‘clear actions and timescales to show how the gap (in future budgets) is to be addressed’.
Government-encouraged privatisation has also added to Hackney’s debt. The outsourcing of benefits and council tax to the company ITNET cost the borough £38m when the deal went sour. ITNET meanwhile announced a pre-tax profit for the year of £12.5m. Outsourcing of abandoned vehicles collection is intended although £130,000 of the Neighbourhood Renewal Fund is to be used on it until that happens. And privatisation of Waste Management now seems likely to cost more than when it was in the hands of the council.
The Government claims that the £25m is ‘an exceptional offer of support to prevent unacceptable cuts in services’. Yet £13m cuts are totally unacceptable and more will be scheduled for next year. The Government has provided stringent conditions attached to the money. At least £10m must be made available for future years and so is not available for services at all.
Once again the people of Hackney are left dangling on a thread wondering about the future of their community and what next year’s budget will bring.
News from Hackney Not 4 Sale
Hackney Not 4 Sale, Box No. 7, 136-138 Kingsland High Street, London, E8 2NS. Tel: 07950 539 254.
Privatisation + Gentrification, Reaction and Resistance, in Hackney’s ‘Regeneration State’, 2001
An in depth look at the problems facing the borough by a community activist from Haggerston
The London Borough of Hackney in 2001 was the last word for municipal incompetence, swingeing cuts, privatisation, and eastern european levels of poverty – a standing joke amongst most Londoners.
A range of ‘regeneration’ anti poverty programmes had been underway since the 1990s with limited success against poverty although carrying out most housing privatisation ballots in the country.
What had changed was the booming real estate market not just of trendy Hoxton. south of the ‘digital curtain’, but across the whole Borough.
May 2001 saw the New Labour Council emerging from a period of Coalition rule with the Conservatives – Hackney was after all the home of some of New Labours leading ideologues and is now the testing ground for New Labour’s restructuring of the Inner City.
What is the real situation, how did we get here and as or more importantly what should we do next?
This piece will argue that, the collapse of the local council and its replacement by a skeletal ‘regeneration state’ is furthering gentrification and the gradual eviction of the existing multi cultural working class community by:
- further property sales with fewer controls on development leading to a population density which excludes low income families with children
- reduction in support services for working class people, especially women, particularly in the areas most affected by gentrification
- low income people [especially younger people in the private market rent sector ] being driven out of the Borough by the chaos accompanying ITNET and housing benefit privatisation. [This has also led to feelings of insecurity for the whole population]
- housing privatisation [stock transfer] has led to families [led generally by women] having almost no access to council housing and has also provided a nightmare scenario with which to threaten the rest of the tenants in council housing
Meanwhile, large developers are increasingly crass in their proposals. The initial pioneer ‘arty’ gentrifiers are now under increasing pressure from the office development needed for the reinforcement of London as the financial centre of the European Union.
Elements of capital [around Mayor Ken Livingstone] are trying to force some of the profits from these development to restructure social structures around the City. Instead of existing working class multicultural communities, a new Victorian style ‘worthy poor’ of key workers [mostly white] will receive semi subsidised housing providing a safe social mix for the new rich.
Many of the elements of gentrification seen in the 1990s around Hoxton are now being repeated in the Broadway Market – Town Hall corridor.
The response of the left to this crisis has been disappointing – in fact the populist right around ‘Hackney First’ are making the most clear gains. With the defeat of the determined UNISON campaign of 2000 – 2001, largely due to lack of a sustained second front … community campaigners need to reassess strategies.
– Hackney in 2001 – a sketch:
[See map on centre pages – from “The Hidden Art of Hackney 1996]
Hackney is an inner city borough of London bordering the financial centre of The City. It has a population approaching 300,000 – in itself this is hard to judge as the post poll tax 1991 census was effectively ignored in many areas, and large scale illegal and semi legal immigration mean that the 2001 census will also be inaccurate. Hackney has a population of over 50% ethnic minorities – with large Black communities from West Africa and the Caribbean, a large Turkish and Kurdish population and smaller Irish, South and South East Asian, 1st generation European [e.g. Spanish] and long standing orthodox and secular Jewish populations. Hackney has also the biggest lesbian population in Britain and allegedly the most artists in Europe.
The average income is half that of the London average – around £12,000 per year although about 2/3rds earn less than this. 40% of the population live on Income Support and thus even further below the poverty line. Some 40% of households are Council tenants, about 10 % are tenants in the market rent private sector, another 10% live in recently privatised ex Council flats with controlled rents til 2003 – 2009 [depending on the scheme]. The 40% owner occupiers include some Yuppies but also a significant number of working class owner occupiers.
Without wanting to overgeneralise – the south of the borough [Hoxton, Shoreditch and Haggerston] has both more Council housing than the north, and more of the ‘digital yuppies’ in renovated lofts along with a few streets of bourgeois housing in De Beauvoir. The south of the Borough was a stronghold of the National Front in the 70’s, with the fascist’s national HQ located on Shoreditch High Street in 1979. It’s now a successful multicultural community, although older white residents often dominate residents associations and other local groups and even in the 90’s faded red, white and blue fences were still to be seen.
Stoke Newington in the north of the Borough has much of the rest of the gentrified housing, mostly terraced street property. Clapton and Stamford Hill in the north east have more working class owner occupiers, and large Hassidic populations. Homerton and Hackney Wick in the east are similarly poorer. Large estates and small pockets of terraced housing and mixed industrial and warehousing estates are found throughout the borough.
– The local Council is on the verge of financial collapse:
The UK’s first ever ‘Section 114’ notice of impending bankruptcy was posted in late October 2000. This meant that all non statutory spending was cancelled – and led to all casual staff being immediately dismissed. For example, up to 50% of bin men were sacked. A temporary reprieve was granted [helpfully prior to the national elections] with a batch of sales, cuts and privatisations [e.g. an £86M sale to the US TNC Bank Lehman Brothers – of Hearn Street, one of the last vacant spots on the edge of the City]
But the summer of 2001 saw the threat of Central Government take-over once more. At the time of writing the Minister was threatening a take-over in September 2001.
Residents don’t enjoy low levels of tax to go with the low level of services. Council tax rates are amongst the highest in the country – for a 1 bed room council flat [Band B] residents need to find £717 a year [with a rise to £800 next year – the rent for this sort of flat would be £55 per week] while for the national bench mark Band D, £922 will rise to over £1,000 next year. Council tax, however, makes up less that 10% of the Borough’s income – most of the rest comes from national government subsidies which have been cut significantly in the past few years – over £100M according to UNISON.
As seen below, the cuts due to the council’s financial crisis mean that it is services for working class people which are those cut, and that the skeletal [‘regeneration’] local state is unable to regulate a gentrification building boom. However, even in the late 1990s before the latest round of cuts, the council was an albatross around the neck for anti privatisation campaigners … after defeat in 7 stock transfer privatisation votes [the most in Britain] it’s clear that working class tenants would do almost anything to get away from Hackney Council.
Defence of the status quo wouldn’t be a route to popular support.
– Privatisation of property and services is being rapidly increased:
The Section 114 notice was the lever which was used in the case of the most difficult privatisation – that of waste disposal. This part of the workforce was traditionally the most militant – UNISON demonstrations often were led by ‘borrowed’ Garbage Trucks. In August 2000 these workers had defeated an attempt to privatise the service. But by December 2000 the waste management contract was sold to Service Team [founded by South London Labour Councillors]. The much reduced and now isolated workforce was willing to give their new employers a chance and didn’t join in the industrial action. In early 2001, Service Team sold their whole company to the American TNC Cleanaway.
Since then the pace of privatisation has if anything quickened, particularly with the defeating of industrial action and the Labour group winning and then keeping a majority. [The cuts in 2000 were seen through by the Tory – Labour Coalition of the time.] Privatisation is increasingly targeted to facilitate gentrification and cut services for local working class people, especially working women.
June 2001 saw a total of 135 different properties listed for sale to raise an estimated £70M including:
- Chat’s Palace [one of 2 community arts venues in the borough]
- much of Broadway Market [on one of the gentrification fault lines]
- the 2 nurseries closed earlier in the year
- one of the 2 boat clubs in the Borough [although to complicate my argument, this one was in the north of the borough]
- part of De Beauvoir School and the De Beauvoir maintenance Depot [again in one of the gentrification hot spots]
- and at least 2 semi derelict open spaces used by their communities as parks
– while the sale of the plot in Provost Street Hoxton went ahead despite it being used by the Boroughs’ EBD special school, the Yoakley road garden in [already gentrified] Stoke Newington was saved after protesters ‘planted a tree as a symbol of their commitment’.
[The Shoreditch New Deal’s Shoreditch People [August 2001] printed a list of the proposed sales in Shoreditch complete with the officer’s comments on many of these that they ‘were likely to encounter local resistance.’]
A further 2 Nurseries were closed as well as the Hoxton Hall play group.
The borough’s 2 remaining swimming pools were put out for private management in July. Haggerston Ward Councillor Guy Nicholson spoke of building up the borough’s sporting facilities but not of reopening the closed pool in the heart of Haggerston.
Re-opening Stoke Newington’s Clissold Pool remained a priority for the Labour group despite being £15M over budget at £26.7M … Haggerston pool required some £300,000 to reopen the previous year. The two remaining pools have seen reduced services but again on a quite different level – while Kings Hall in the north of the Borough ‘merely’ had its canteen closed and cleaning contracted out, at Hoxton’s Britannia, hours were reduced and fitness classes cut and the kids’ gymnastic programme closed.
The bowling green in Stoke Newington and the Springfield park conservatory were also to be shut. In addition, the new leisure centre on Holly Street was to be transferred to a Trust. The old Library in Brownswood road [shut along with Haggerston library, that in South Hackney and De Beauvoir’s Rose Lipman in the mid 1990s] was to be sold along with another depot in Morning Lane.
[The location of these facilities also contradicts my argument about the south of the borough being particularly hit – perhaps it’s more accurate to suggest that while the cuts are broadly geographically spread the people affected by the closures are socially concentrated – mostly working class.]
Remaining services were also under threat – for example both Chat’s Palace and the Hoxton Hall were under threat of closure due to reduced funding – so that in the borough ‘with the most artists in Europe’, working class people were not to have access to any arts facilities … except for the newly opened Ocean [see section below].
Compared with the demos of the year before, the level of resistance to these cuts was unfortunately minimal. [The Green Party [with 2 Stoke Newington Councillors] took a stand to defend the Clissold park deer population who were to be deported to the Haggerston’s Hackney City farm. “… you should see the delight on my daughter’s face when she sees a goat or a deer” commented a Green Councillor.] A small Demo was called by Hackney Fightback. Pensioner activist Mynra Shaw pointed out that
“… Hackney Council continues to sell off property to speculators and developers. The presence of more and more of these speculators, interested mainly in developing profits, mean they have an overloud voice in deciding what the ‘open market’ is in Hackney. The voice of tenants and residents is on the way to being wiped out. This is more serious, as the Fair Rents Officer takes the open market into consideration when he sets the rents for remaining council and housing association tenants.”
The reality of privatisation was underlined by Nord Anglia, who run the privatised parts of the education department and overcharged the Council £400,000 for their ‘services.’ Service Team received a large top up to ensure that a better service could be delivered. [The details of this were muddied by a change in the charging mechanism from a set fee to that by tonnage – up to £2M additional funding was available for Service Team.] However it was on the privatised estates and in the effects of the contracted out Housing Benefit service that the effects were most severe.
– Political Corruption, a Skeleton State and Housing Benefit Privatisation:
“The main reason given by Kevin Crompton, director of leisure, for the closure of Haggerston baths was that they had rats and mice. If that was the case he should close the Town hall on health and safety grounds as it is the biggest white elephant in the country and it is infested with rats and an assortment of other pests …”
For years Hackney has been rotten from top to the depths of middle management.
Stoke Newington police have been notorious for dealing crack and a number of deaths in custody. Community policing on estates consisted of the TSG riding through at dusk waiting for some action. Some police were even busted for stealing cars on the beat!
The council’s previous Chief executive, Tony Elliston, left his post in early 2000 with a massive payout. Max Caller, his replacement, is best known for his £150,000 pay packet and attacks on Council staff. Caller was also involved in a cover up of an investigation which showed discrimination against black staff in the Emergency Repairs department. The ‘Director of Law and Probity’ [Chris Hinde]who was meant to investigate this, and the allegations against the Mayor of planning corruption, has now left his post. …
Despite codes of conduct which seem to be used most against front-line staff [e.g. involvement in a squatting group is gross misconduct and can lead to being sacked], there is a history of such actions going unopposed. During 1998, the executive in charge of the estate sales programme left his post in September to start a new job as a regional director with one of the purchasing Housing Associations with a 20% + pay rise. The Borough Solicitor [Chris Hinde in his old post] did nothing.
Joe Lobenstein, Mayor from 1997- 2001, did finally get some justice. He was fined £1,500 for safety breaches at his factory. He treated his workers as badly as the Council treated its tenants, workers and residents:
“It was common practice for workers to climb on racking and risk falling up to 12 feet.”
One of the immediate effects of the Section 114 notice was that all temporary staff were terminated. According to ‘The Hackney Society’ [a built environment lobby group] this meant that the already near bottom of the table Hackney planning lost 17 members of staff with a freeze on recruitment. Once when I tried to call Planning the reply from the council switchboard was that they didn’t think anyone still worked there. By the end of 2000 the already limited ability to control development was terminated.
A similar story of threadbare staffing applied to a lesser extent throughout the council bureaucracy – what controls there were on political and financial corruption were limited. And safeguards of good service for local people were non existent.
ITNET, who won the Housing Benefit administration contract in the late 1990s, understood this well. Their first act after taking over was to cut the workforce by a third. Within months the service, which was never very good, plunged to being disastrous. The local press was filled with weekly stories of the latest disaster – in fact the only comparison was with other contracted out HB services in Lambeth, Islington and Newham.
The details of ITNET need their own article – but I can identify 3 different effects which need discussing:
– enormous pressure was put on the finances of the Council, and of the Housing Associations in the Borough – in fact in February 2001 one of the 7 transfer landlords [Clapton Community Housing Trust] running privatised council flats in Hackney needed to be rescued by it’s ‘mother’ Housing Association the Guinness Trust.
– enormous stress was put on every council and Housing Association tenant on benefit due to their being continuously behind in their rent and receiving notices of Seeking Possession from their landlords. However, to my knowledge, no-one was evicted from social housing due purely to HB related arrears.
[What did happen, however, was that certain tenant representatives and councillors had their democratic rights curtailed due to ITNET related rent arrears. E.g. a Clapton tenant rep was sacked from the CCHT Board before it was ‘rescued’ for rental arrears in February 2000 and an independent councillor lost voting rights due to ITNET related rental and council tax arrears.]
– in the private market rents sector however such safeguards against evictions did not apply … and while many tenants already in place hung on, private landlords tended to refuse to house Housing Benefit dependent tenants. They were driven out of the Borough or people who would have 2 or 3 years earlier moved to the Borough were not able to. Even a Lib Dem Councillor was affected – giving ITNET HB arrears as a reason for resigning and moving out of the Borough.
In April 2001 the contract with IT NET was broken, leaving the Council holding the baby. While service has somewhat improved, the long term effect on low income people’s access to the private market rents sector in Hackney is likely to remain – the already fertile field is left clear for further gentrification.
– Gentrification in Hoxton:
“The chicest place in the inhabited universe” – The New Yorker:
“The gentrification of Hoxton is well under way and the combat trousers and trainers brigade are firmly ensconced in the ‘beautiful people bars’ in and around the square.”.
Around 1990 when the Shoreditch triangle in the south of Hoxton was still largely semi derelict ex clothing industry warehouses, the Dalston City Challenge corridor was drawn to include a large part of this area as well as Hoxton Square – it was a very long way from Dalston. The regeneration programme was varied:
- A new cinema for the London Film Makers Co-op [The Lux]
- Redevelopment of Hoxton Square
- Renovation of the Arches under the ‘Tube line to be’ north from Bishopsgate to Dalston
- Funding for basic refits of warehouses given to landlords such as Glasshouse
Consciously or not, these actions provided the fuel for the gentrification of Hoxton. The tempo and style varies from place to place. At first abandoned but liveable warehouses were converted into lofts and a couple of existing bars became busier. Ill effects were seen early – with lofts pumping their sewerage onto the Pitfield estate and stairwells being used as toilets and places to have sex by people using the bars.
A gentrification whirlpool began [with the help of central government subsidy].By the late 1990s larger scale new developments were more common. Some were wholly private – such as the loft developments by Wenlock Barn Basin [western Shoreditch] and Kingsland Basin [in De Beauvoir] and along Kingsland Road, where prices for lofts were now topping £400,000.
Others were ‘market rent schemes ‘ from ‘charitable’ housing associations – beginning with the award winning Shepherdess Walk scheme in 1999, where rents were a minimum of £145 a week: in response to local tenants saying that it was “fancy flats for yuppies” a spokesperson said:
“The building will be clad in cedar wood
and terra cotta and will look very nice.”
Meanwhile on council estates funding for repairs was particularly tight in the late 1990s [due to the Tory spending plans being carried on by the Labour Party]. On estates primed for privatisation no repairs at all were done in the lead up to voluntary privatisation votes and estate managers were not replaced. On the other [better] estates tenant representatives were supporting:
“… people with cockroach infestation or people who have to live and sleep in rooms that are so damp they’re covered in fungus and the wall paper is falling off …”
By 2001 market rents in social housing were £200 a week [for example the Peabody schemes in Fellows Court and now at Wharf Place – both in Haggerston]. While older and larger Housing Associations such as Peabody led on market renting – other HAs began to get in the act – for example Community on the Haggerston Library site. But even Peabody couldn’t get rid of everything – it had to sell a block in Haggerston Road to Metropolitan after finding that yuppies weren’t willing to pay market rents to live opposite Haggerston estate!
‘Shared Home Ownership Schemes’ were used to sweeten the pill – if your income was more than £20,000 a year , and sometimes combinations were used – whereby the SHO scheme provided a ‘social housing’ component to ease planning objections – for example the 25% of flats for ‘affordable homes’ in the St George Hoxton Square development.
This development had a knock on effect. Tenants who had exercised their ‘right to buy’ and then let out their ex council flats could also charge rents of £200 + a week for a basic 3 bed flat – or thrice the going rate for a council flat of the same size. This of course further boosted the impetus behind right to buy and further white-anted council estates.
Speculators were also active leafleting estates with offers to buy out secure tenant’s ‘right to buy.’ They would provide cash [sometimes as little as £5,000] to a tenant who would buy the flat [with the speculator’s money] signing over the rights to let it out to the speculators, and selling it on after the waiting period of 2 years. This meant 2 bedroom flats could be picked up for as little as £20,000 plus the payment to the secure tenant.
By 2000 the London real estate market had heated up to such an extent that a new round of tower blocks was being proposed for the inner city. Ken Livingstone, the newly elected mayor, gave his support for these so long as they provided subsidy for social housing schemes and transport in east London. However, rather than affordable rented housing, the social housing talked about was more of the not very affordable shared home ownership schemes for ‘key workers’ who were otherwise priced out of the market.
With the support of the Corporation of London [the council for the City’s Square Mile] the long term plan is clearly to replace the City’s poverty stricken necklace of estates in Finsbury [Islington], Shoreditch and Whitechapel [Tower Hamlets] with a mix of the new rich and the new ‘deserving poor’ of key workers.
– The estates just off Hoxton Street are just a stone’s throw away:
By 2000, developers were increasingly confident of their position and using all available loopholes to cash in. Even when leases held rents for 3 years, service charges could be jacked up for example from £20 a week to £60 a week plus the original rent. Sometimes this meant that tenants wanting to break leases lost not only their 3 months deposit but had to pay extra to get out of the lease. David Nicholson of Glasshouse – who with Dalston City Partnership cash developed many of the early lofts said:
“We are not a charity, we are a commercial business … Market rent in Shoreditch has risen considerably in the last 18 months. We’ve got tenants who are willing to pay … and are not going to take up hours of our time complaining about the nitty gritty.”
To underline this, in August 2000 the charity running Shoreditch Town Hall Trust showed that it wasn’t just businesses evicting tenants on cheap leases. 20 small businesses and charities had their leases terminated to allow the building to renovated. As the Daycare Trust commented on their eviction – “we thought we were a part of [the Town Hall Trust’s] long term plans. It’s obvious we’re not.”Just as ‘not for profit’ Housing Associations needed to build their surpluses, the Trust had tenants willing to pay.
In September 2000 developers went from bending the law to breaking it. At the Goddard and Gibbs shop on Kingsland Road, the listed frontage was destroyed against the planning permission for the property in order to make way for stylish lofts. ‘The Hackney Society’ commented:
“The Council is either unable or unwilling to do anything and seems to go along with the developers ‘gold rush’ in Shoreditch on the basis that it ‘creates jobs’.”
Even beforehand, the balance of class forces at work was made clear in the ‘successful’ campaign by the Hoxton Luvvie posse to save “the Light” [a converted power station bar] – they won against the might of Railtrack.
By 2000, not only were the concerns of Hoxton’s majority – working class council tenants – irrelevant but the concern voiced in the local media was primarily that gentrification would “spell the end for the arty atmosphere that began the revival.” The Hackney Society voiced concerns that the “huge increases in land and property values [… were] threatening the future viability of local charities, community groups and small businesses … small businesses are also being hit hard in particular new businesses in the IT and creative sectors – the very businesses Hackney is keen to attract.”
Working class people appeared in this discussion only as an ungrateful or criminal element. The project director at Shoreditch Town Hall [yes – the charity mentioned above] spoke of ‘resentment’ from older residents over £500,000 lofts next to their run down council flats, while a gallery director from Hoxton Square said:
“What’s becoming more apparent are the crime levels. The estates just off Hoxton Street are just a stones throw away. There’s increasing resentment. More and more [very large!] windows are being smashed.”
Reports that homeless families were again being put into bed and breakfast – in part because the council had sold the hard to let estates where they had been placed previously began to provide a context for this. By February 2001, the 380 hostel places were full and 450 families were in bed and breakfast. To compare however, at least 15 % of the 7,000 privatised flats were standing empty [following a pre-privatisation policy of running down the estates] and at least another 100 street properties had been sold to subsidise privatisation schemes.
Many of these families couldn’t even be placed in hostels in Hackney because other London Boroughs had used cheap accommodation for their homeless families. The clear losers in all of this were working class women and their families [who dominated the numbers of those who got into Council housing through the homelessness provisions] – they were not welcome in New Labour’s Hackney.
– Who runs Hoxton then?
In March 2001 Shoreditch’s new elite attempted to ban Abba’s Dancing Queen! Residents of live work units in Redchurch Street complained about the Village People’s YMCA as well as the Conservative Party’s Annual Winter Ball which were held in Marquees on the Bishopsgate Goodsyard.
“We cannot sleep because it goes on until one in the morning and in the summer we cannot relax on our rooftop garden without having to listen to Chris de Burgh’s ‘Lady in Red’ or some other dreadful tune.’
‘Traditional’ East End culture in the area had no chance then – the Brick Lane Music Hall – pushed from Brick lane to Shoreditch by rising rents in 1995, faced closure at the end of 2000 because of the rent going up to 400% to £100,000 a year. The landlord said: “unfortunately we are not a charity …”
The office space needs of the City didn’t care for anyone however. Facing stiff competition from Docklands, a number of large developments are planned which will also impact on the ‘arty atmosphere’. New Deal for the Community managers said a 16 storey office block [87,000 sq. m] planned for the Hearn Street site would push “up rental costs and … businesses out” as well as taking up almost the entire site and leaving no green space according to the Conservation Area Advisory Committee.
More celebrated, is the case of Spitalfields market – “a vivid antidote to the blandness that corporate culture brings in its wake” – next to ABN-AMRO’s headquarters and Liverpool Street Station. Half of the market has already been lost to a 600,000 sq. meter office development and the rest is clearly under threat despite the protests of the developers and market owners. Luminaries such as Terrence Conran are weighing in to protect the creative hub of gentrification and are willing to trade a bigger development elsewhere to protect it. While the new residents fight a losing battle against Europe’s finance capital or prepare to move to the next chic scene, the interests of the working class majority are nowhere to be seen.
“… it’s so close to the City, firms won’t even know they’re in Hackney.”
– the ‘Regeneration’ of the Town Hall Square [where trees aren’t as important as in Stoke Newington]:
Broadway Market is a narrow street market between two parks [Haggerston Park to the south and London Fields to the north]. It makes a geographical link between Hoxton and the Town Hall precinct and is already used as a bike route for this. It’s showing the Hoxton effect – five years ago it had with one yuppie pub [with Hoegaarden on tap] and a listed pie and eel shop which baked vegie pies on demand. Now there’s 2 expensive restaurants, 1 yuppie bar, a health food bar and half a dozen boutiques. … and while writing this a Japanese noodle bar has opened! Not far away, ‘regeneration’ money was used to do up the church next to Hackney Road where the 291 club is now based . Facilities for local people have not similarly expanded – as indicated earlier it is precisely in the south of the borough that cuts in provision are tending to be targeted.
At the moment the Market is still on the cusp of full gentrification. Empty shops were until recently rented cheaply as artist studios – however, a significant rebuilding programme is taking place this summer, and with the sale of the rest of the council owned shops … I’m happy to take bets as to the future of this street.
June 2001 saw the first New York style firebombing of the block at the southern entrance to the market shortly after the squatters there had been evicted.
Motives were unclear but the landlord did not have to pay the council until the building was in use – and so gained a number of years interest free property speculation rights.
Further north, just south of the town hall, is Ellingfort Road. Here until 1999 were around 30 squatted homes – which have now voluntarily incorporated themselves [keeping just over half the homes] into an existing Housing Association. The rest of the London Fields area is now booming with loft live work units.
And on to the Town Hall Square – and site of another regeneration programme. According to Guy Nicholson, Regeneration Chair of Hackney: it “could be something really special” … 
The Ocean is a music venue opened opposite the Town Hall on the site of the old Hackney Library and Museum. It has already attracted criticism over the price of tickets [up to £27], the wage of the director [£80,000] and the way it’s functioning as an oasis for a “rich young elite.” Like many venues the Ocean starts with high hopes for participation and access … it’ll be interesting to see how it evolves. I suspect that the social pressures from gentrification and the regeneration of the rest of the square will force it in less and less accessible direction.
Relations with local people started poorly with complaints of sexual harassment and parking problems. Noise complaints were dismissed as “whinging.” Ocean publicity was fly posted over parking control notices locally – there was a rising tide in Hackney.
Opposite the Ocean is the Town hall, with its Square most often frequented by the local street drinkers and demos against the Council. In May 2001, the Labour controlled Council went ahead with plans to spend £1.1 M to do it up. Critics of the scheme pointed out that 4 different types of limestone wasn’t perhaps the aim of Neighbourhood Renewal funding which paid for over half of the scheme. The Hackney tree wardens mounted a very vocal campaign against the scheme due to the loss of 15 trees and pointed out that meetings were not open to the public and minutes were kept secret. This is of course what Haggerston Ward councillor and Chair of regeneration Guy Nicholson called “probably one of the widest [consultation] exercises on any planning development the borough has ever seen.” Indeed. [Neither was Guy convinced by arguments from the Lib Dems that this money could be spent on reopening Haggerston Pool.]
The decision to save the Yoakley Street garden within the next month [see above] suggests that in Hackney, all trees are equal but some trees are more equal than others.
Complaints about how the regeneration of the Square was going could be assuaged by promises of a new Technology and Learning Centre [a rebuilt library]. Unfortunately cuts in the Learning and Leisure budget meant that “the Council can barely afford to buy books for the new library … and has set aside £150,000, warning that it may cut the borough’s book fund.”
Opposite the TLC lies the Hackney Empire and the Samuel Pepys Bar. The Pepys was for years the late opening ‘alternative’ bar in Hackney. It was shut along with the Empire for refurbishment in May 2001 … the ensuing street party in the Town Hall square got a bit out of hand – although participants commented that it was more simulacra than reality. What’s clear is that they didn’t want to go to the Ocean!
Hackney UNISON members fought a determined campaign against council cuts and attacks on their wages and conditions from 2000 – 2001. This needs a separate analysis but Hackney Council workers showed well into 2001 that there were willing to take unofficial action particularly against victimisation.  In addition, unlike in the late 1990’s under the previous Branch Leadership, the current Hackney UNISON officials have been willing to continue a dispute in an attempt to carry it through to victory.
But what was stressed to me by a number of UNION members however was that their campaign would fail without a ‘second front’ being opened by militant community struggle. This never came despite a series of local disputes over specific closures – some of which were successful – Burbage School in Hoxton for example.
The attempt to have a united front of community struggles through Hackney Fightback fell apart with open splits between the SWP and the Socialist party – leading to separate candidates standing in Council bye elections in June 2001.
Worse still, the Council bye-elections showed that the main beneficiaries of Hackney’s crisis far from being the left were the populist right wing formation Hackney First – who achieved 546 votes in 2 wards versus Socialist Alliance’s 513 in 3 wards. In fact, given the level of crisis in Hackney, the SA’s candidate losing her deposit with 4.6% of the vote in Hackney South and Shoreditch was particularly bad news.
In 2001, the BNP showed that given a crisis in political life – the riots in Oldham as much as the crisis in Hackney – the english electorate would be willing to vote for a ‘radical’ political alternative. In Hackney, with a organised membership of nearing 1,000 the far left working together could not do the same.
“Now the election is over, could we please get on with some politics? Throughout the campaign, many in the Socialist Alliance repeated that elections were a good opportunity to talk to people about politics and gauge attitudes towards radical alternatives. Well we came, we spoke, we offered alternatives, we won celebrity endorsement. The result; crushing defeat, with barely a saved deposit to pay for a sorrow drowning piss up.
In the last edition of Red Pepper John Rees argued that we need (under the ever tolerant guidance of the SWP) to ensure the SA remained responsive to the ’grassroots’. But that’s the problem, John, there’s barely a grassroots to speak of.”
So what is left to do? Maybe it’s time to look at how we can develop some grass roots.
In Shoreditch, community activists working within the New Deal Trust, alongside Hackney Independent conducting mass leafleting work, have turned the tide on stock transfer in the south of Hackney. Looking at this combined approach of confrontation inside and outside the structures of the regeneration state can begin to answer the question of how to build mass support for progressive alternatives to gentrification and privatisation.
A number of other positive local community campaigns have happened over the last two years – at the end of this piece is documentation of some of them:
– Occupation of the Atherden Nursery
– Rent Freeze Campaign
– Organising on privatised estates.
Hackney Socialist Alliance says they want to do serious work in the community and to correct their previous orientation on electoralism – lets see how they go …
“Before the sell off, residents asked me what could possibly be worse than the council?”
the facts – does stock transfer work? Can Housing Associations do the job? Hackney, in East London has had the most successful transfer ballots in the country. Each flat of the 7,000 so far privatised has had a massive central government subsidy – averaging at over £10,000 per home. As well Housing Associations have developed new estates through the heavily subsidised [Hesseltine era] Comprehensive Estates Initiative e.g Holly Street – where some homes have had £100,000 spent on them!
[All reports from Hackney Gazette except where marked *]
10/12/98 Council sells 50 street properties to increase subsidy for Clapton transfer [led by Guinness trust] by £3.6 million
14/1/99 Council propaganda team wins ‘Best Communication with Tenants Award’
The selling of another 50 homes for the South Hackney [owned by Sanctuary] group criticised
15/4/99 Council propaganda video wins the ‘the corporate video world … equivalent of a BAFTA’
* Hundreds of copies found waterlogged under leak in abandoned council building
22/4/99 CEI scheme criticised as having run out of money – with only 33% of budget available for the south east corner of Clapton Park estate
20/1/00 12 year old Martin Williams dies falling off scaffolding on Kingsmead estate [owned by Shaftesbury]
10/2/00 Council response to death is “The council has no input on that estate either in terms of its housing management functions or its health and safety responsibilities”
24/2/00 Tenants in Upper Clapton left without water by Newlon HA. [n.b – not ex council tenants]
* Tenant rep sacked from board of Clapton transfer, for housing benefit rental arrears
2/3/00 Tenants of South Hackney group take landlord to court over wheel clamping
9/3/00 New Islington and Hackney [NIHA] HA tenants accuse landlord of ignoring drug dealing, leading to murder of tenant’s partner [n.b – not ex council tenants]
23/3/00 NIHA says “death was not our fault”
13/7/00 Coroner’s inquest into the death of Martin Williams [also known as Karshak] says: ‘The risk of children climbing on to the scaffolding had not been identified by the new landlords.’ “The precautions that were in place were not adequate. The chicken wire was not effective, indeed it wasn’t intended to be.” Site manager said “there was no security” but the coroner did not consider that there was enough evidence for a verdict of unlawful killing
22/7/00 30 flats left with out power on Peabody’s Pembury estate for 9 days – torches were distributed by the caring landlord
24/8/00 Children still playing on ‘Mead building site. Kingsmead Homes remove playground on estate and move to evict some tenants because of alleged anti social behaviour by their children
24/8/00 Pembury estate tenants [transferred to Peabody] say that their landlord is ignoring drug dealing on the estate – “… they won’t do anything until they have half a dozen murders”
7/9/00 Rat plague reported in Clapton estate run by Newlon + 4 other HAs – HAs and the Council blame each other [n.b – not ex council tenants]
14/9/00 Council targets supported accommodation as next up for privatisation
21/9/00 Tenants march on office of Sanctuary in South Hackney and dump rotten food – the landlord had waited 24 hours to restore power after a storm – they had no one on duty
26/10/00 Broken sewers send Gascoyne residents to hospital – tenants comment that “the heirarchy of Sanctuary disappear at 5pm of an evening and forget about their tenants”
2/11/00 William Hague pays his respects to Martin Karshak – the only politician to do so
15/2/01 * Tenants in Shoreditch Court [Haggerston] have agreement changed on them then given to a blind tenant rep to sign [from Housing Today] [n.b – not ex council tenants]
12/4/01 * Tenants in Hindle House [Dalston] find out that the renovation they were promised have been changed – while the works are being done by Southern Homes [from Housing Today]
28/6/01 12 year old falls through bath onto cooker below in Ujima owned flat in Shoreditch – she stops herself with her elbows [n.b – not ex council tenants]
19/7/01 Tenants in Hindle House criticise Southern Homes for failure to control prostitution and crack dens
“The Government is simply not prepared to let the present situation continue. It is unacceptable that people who live, or work in Hackney should have to suffer poor services because of the council’s corporate failure. The package of measures the Government is announcing today is designed to protect and improve the key services and ensure the council tackles its budget deficit.
“I have directed Hackney to produce a budget strategy to start the process of getting them back into balance. My Department will be writing separately to the council about how they can continue to work to return to financial stability, without the help of Government resources, at the earliest possible time. To assist, the council’s leadership has agreed to appoint an independent person to monitor financial progress.
“It is now for Hackney’s elected members and senior staff to ensure that people in Hackney see very big changes. It will involve tough decisions to tackle the years of failure and it will be painful but the Government is clear it must happen. Hackney Council cannot be allowed to fail its people again.
Alistair Darling, Secretary of State for Work and Pensions said:
“Hackney’s residents deserve a good quality benefits service, which has been lacking for too long. No one should have to wait several months for their Housing and Council Tax Benefit claims to be paid. Poor service affects some of the most vulnerable people. It can also affect the financial positions of Hackney’s social and private landlords.
“I have therefore set Hackney a challenging direction to clear its long-standing backlog of work by the end of this year. I shall expect them to do this to acceptable standards and without detriment to current and new work. My Department is working closely with Hackney and has supported them in rebuilding their benefits service. They have made an encouraging start. The momentum must be maintained. We shall continue to monitor the situation closely”
Estelle Morris Secretary of State for Education and Skills said:
“This direction will enable Hackney to establish a new body to be responsible for the management and delivery of education services in the Borough, so as to provide much needed financial and management stability. We have already, with Hackney Council, appointed a joint team to identify the optimum arrangements for the structure and role of this new body. Once this team has reported at the end of September we will support the local authority in swiftly putting in place new arrangements, designed to promote and maintain high standards in education for everyone in Hackney.”
Margaret Beckett Secretary of State for Environment, Food and Rural Affairs:
“Hackney must improve their dismal recycling record and their poor overall performance on waste collection services so that residents get a quality service at a price they can afford. To make this happen the Council must secure the investment that this service desperately needs, raise public awareness about the need for changes in the local culture in the handling of waste, and ensure local people are able to recycle their waste.”
Health Minister Jacqui Smith said:
“It is vital for some of the most vulnerable people in Hackney that social services continue to deliver and improve their services. This direction will require Hackney Council to work with the local NHS to review services for older people and mental health services to ensure that they are delivering best value.
The Social Services Inspectorate (SSI) has been working with Hackney. We have seen some progress in social services and are keen to see that this continues – so that the people of Hackney get the services they need and deserve. We will maintain this support and monitor improvements carefully.”
Benefits dispute led to Byers’ threat
After much wrangling, ITnet finally stopped providing the service to Hackney in April this year, leaving the borough with what it claims is a backlog of 120,000 items of unprocessed correspondence, relating to an unknown number of individual cases.
More importantly, Hackney has to foot a substantial bill for benefit errors and overpayments. The council’s leadership initially expected these to total up to £4.5m in the current year. Now that the borough has set up its own in-house benefits team, which is sorting through the backlog, that estimate has risen to at least £11m.
An ITnet spokeswoman disputed Hackney’s claims, claiming that the council’s correspondence backlog claims were “ludicrous”. The company had improved the council tax collection and housing benefit services it provided, she said, and is running a successful service in the London borough of Hounslow.
Nonetheless, the extent of the errors and overpayments caused senior officers at the council to threaten to issue a section 114 report, which effectively freezes spending, last week.
The report would have blocked Hackney from entering into any new financial commitments until the council has met to consider the document. If this happened, the borough might not have been able to renew the short-term or agency contracts of staff in education, benefits and social services.
The council’s leader, Jules Pipe, whose Labour group recently gained overall control, said: “Although there are identified potential overspends in some of our budgets, these issues have been completely dwarfed by the unforeseen costs that we now face as a result of the failures of our revenues and benefits service.”
The council says it will go to the courts to try and claim back an initial estimate of up to £30m, but it will not come quickly enough to stave off a potential overspend in the current financial year.
Meanwhile, the government is allowing Hackney to borrow enough money to see it through this crisis, and Mr Byers is working with the audit commission to decide whether and how to intervene in the borough’s finances.
Hackney council was not the only organisation to suffer from the break-up of the benefits contract. ITnet itself faced a grilling in the media and the City, with the dispute resulting in the company changing its accounting policy – a move that hit its profits.
The dispute also focused media attention on ITnet’s work in Islington. The council is revising its contract with the company in the wake of what leader Steve Hitchins calls its “unsatisfactory” performance.
Hackney cannot have been the easiest of places to try to run the government’s complex housing benefit system. ITnet claims it inherited a hefty housing benefit backlog and an IT system that was years out of date.
ITnet took over the revenues and benefits service just as political tensions in the council were coming to a head. Hackney became hung in 1996, and a lack of political leadership combined with some bitter disputes and a programme of radical managerial change to cause chaos across the council.
The creation of public private partnerships in local government has often been seen as a remedy for poorly performing services. ITnet’s case proves that no matter how mighty or successful a private company may be, it will never provide a magic solution to the public sector’s problems. Tony Blair should take note.
Lambeth cuts short £48m Capita deal
Steven Morris – Monday July 2, 2001
Lambeth council has severed its £48m contract with a private firm to run its benefits operation, just days after the failure of a similar contract in Hackney led to the threat of government intervention.
The decision by the Labour-run Lambeth to cut short its contract with Capita Business Services is being seen as the latest example of a flawed public-private partnership.
Last week, Hackney’s failed benefits contract with another private computer company – ITnet – prompted local government secretary Stephen Byers to threaten to take control of the council’s finances.
Lambeth claims its benefits service has deteriorated since Capita’s seven-year contract began in 1997. It says the problems peaked in April last year when it faced 55,000 outstanding queries and the quality of the service remains “unacceptable”.
A report from the benefit fraud inspectorate (BFI) published earlier this week concluded that there was a need for radical improvement in most areas.
After a special meeting to discuss the partnership, Lambeth announced it was “cutting short” its contract. From today, 175 staff previously employed by Capita to run housing and council tax benefit services will be “welcomed back” to the council.
Council leader Tom Franklin conceded it would be “some months” before Lambeth taxpayers began to see a difference, but claimed the authority had inherited a “very challenging position”.
However, Capita claimed that it had inherited a backlog of more than 100,000 cases, which was now down to 26,500 and continuing to fall.
Paddy Doyle, Capita Group Operations director, said: “Capita is handing back a much-improved housing benefits service to Lambeth, and will continue to provide the council with key support.
“Capita has worked hard to achieve these service improvements and to enhance customer care for claimants. Now that the service is in a stable and improving state, the council has decided that they wish to take over the management of the service at this point, to oversee future delivery and modification of the service,” he said.
Capita will be retained for IT support and for its call centre service at Coventry, as well as the collection of Lambeth’s council tax and non-domestic rates. A spokesman for the council said a new structure had been established and a new “file tracker” system installed to ensure that files and post do not go missing.
Labour has championed public-private partnerships but has been embarrassed by a series of botched IT projects. Only this week it emerged that government plans to speed up the criminal justice system were in disarray after a £319m computer scheme was delayed indefinitely because of mounting costs.
Ministers have been embarrassed by the failure of a £100m caseworking system for the immigration and nationality directorate, built by the German company, Siemens Business Services.
There were also problems with a new £230m system for issuing passports and in November 1999 the Home Office admitted that 13 of its 17 IT projects were behind schedule or over budget.
Capita is a favoured “outsourcing” company. Recently it won a £100m contract to provide a one-stop shop access to Croydon’s council services and last year signed a £400m contract to set up and administer the criminal records bureau for the Home Office.
letter printed in Hackney Gazette 17th May
Your report last week that Hackney Council plan to take ITNet to court for £30 million damages might have cheered a few of your readers up, but think about this; ITNet have in fact increased their turnover again this year, despite their obvious failures in Hackney, and look set to win more contracts for their “outsourcing” work, meanwhile the agony goes on for those left waiting for payments and threatened with eviction.
Thousands of Hackney residents have been affected by this fiasco – most of them on low incomes and already feeling the pinch – but who will pay for it all? Who decided to sign a contract with ITNet and why did it take so long for the council to respond? Will the real victims of this scandal get any compensation? Don’t hold your breath.
The local government Ombudsman has ruled that a woman who suffered delays and denials from both Hackney Council and ITNet is entitled to a payout of £250 to compensate her for her troubles. The woman, who submitted the appropriate documents for her Housing Benefit claim, was left waiting for months, and only received payment after a complaint to the Ombudsman.
While the amount is hardly a fair reflection of what many people go through, it is clear that the work Hackney Independent has put in through groups like Whose Benefit? and our advice surgeries in Shoreditch, are producing some results for local people who have been snubbed by the Council and messed around by a company like ITNet that should stick to working with computers rather than people.
A report in this week’s Hackney Gazette suggests that Hackney Council may be lining up a damages claim of up to £30 million against incompetent “outsourcing” specialists ITNet. Regular visitors to the Hackney Independent website will know of our long-standing campaign against the “benefits bunglers” (copyright Hackney Gazette) and support for those affected by the firm’s catastrophic performance in the borough and elsewhere.
The Gazette reports that Hackney Council have already had to take out a High Court injunction for “essential data after ITNet wanted an additional payment of £439,000 to deliver the information”. Hackney Council also claim that they have had to spend over half a million pounds since the firm was sacked, just to keep the service running.
ITNet are obviously feeling slightly sheepish about their failures in Hackney as they make several veiled references to the situation in their annual report (“a challenging year” etc.) but turnover is growing at over £158 million (profits dropped apparently). And despite the fact Bridget Blow (director) took home £50 thousand less this year than last (our hearts bleed for her), she still managed a tidy £235 thousand (and don’t forget those two and a quarter million shares ).
If Hackney Council is serious about taking ITNet to court then good luck to them, but what about the thousands of working class Hackney residents who have been victims of this scandal – will we get compensation too? Unlikely.