Claims cure questioned – article reprinted from Guardian Society.
As Hackney tops the table of complaints for Housing Benefit delays in the whole country, the Guardian newspaper looks at the link between privatised services and standards of service.
Wednesday October 31, 2001
Privatising services could be the solution to the “error, waste and fraud” that characterises administration of housing benefit, the audit commission claims today. Yet inquiries by the Guardian suggest a clear link between the worst performing benefit services and privatisation.
A report by the commission says long delays in housing benefit payment are causing hardship, anxiety and even the threat of eviction for claimants. It recommends councils consider “outsourcing” benefit administration as part of a package of measures to improve the service.
The report says some councils, particularly in London, are “open to challenge” because they are taking more than 100 days to process new claims. It adds: “Outsourcing, and partnerships with other councils, or with the private sector, are potential solutions.”
However, there are 14 local authority areas in England where new claims took more than 100 days on average to process in the last financial year. In nine of these, benefit was administered by a private contractor rather than the council.
In the capital, the picture is even starker. All eight of the London boroughs which took more than 100 days to pay a new claim last year had contracted out their benefit administration. Of these, Hackney and Lambeth now provide the service in-house, with Newham and Waltham Forest planning to do the same.
Of the 13 London boroughs which contracted out their services last year, the average time to process a new claim was 117 days. Of the 19 remaining boroughs with in-house administration, the average was 52.
Greg Birdseye, director of the audit commission’s project, says: “Local authorities need to focus on how to get their housing benefit service working. There are a range of things they can do, one of which is outsourcing.”
Liz Phelps, social policy officer of the National Association of Citizens Advice Bureaux, was a member of the commission’s advisory group on the report, Housing Benefit Administration. But she queries its conclusions on contracting-out. “Our evidence is that thousands of [our] clients have received a disastrous service from contracted-out housing benefit services,” says Phelps.
Community activists in Hackney are fighting vested interests and a deafening press silence in an attempt to stop the debt-ridden and notoriously corrupt council from destroying the fabric of the borough.
Cuts are also being made in other areas attacks on council workers’ pay and conditions have been intense, with pay cuts of up to £1500/year and cuts in overtime, shift allowances and flexibility.
In the midst of all this, the council is reported to be pushing plans to pave over the Town Hall Square, at a cost of £1m, £600,000 of which is taken from the Neighbourhood Renewal Fund cut straight from the budget of services such as playgrounds, law centres, youth projects, arts and ethnic minority support groups which are of vital benefit to the people of Hackney. The square currently contains trees and flowerbeds and, while in need of some renovation, is hardly the most pressing priority for a council in Hackney’s dire straits.
The campaign against the cuts and sell-offs is gathering pace. Activists began by squatting an empty shop and setting up a spoof estate agent with information on the properties being sold off. This was followed, on 12th October, by an occupation of the offices of Nelson Bakewell, the real estate agent dealing with the sales, calling for them to withdraw all Hackney Council properties from the auction on the 15th. The auction went ahead, but with paranoid-level security and a lively demo outside leafletting passers-by and potential bidders. Inside, the auction was disrupted by local residents complaining at the selling off of services. The disruption focussed on the sale of Atherden Road Nursery, which was closed earlier this year, then occupied and re-opened by protesting parents (Hackney is currently short of around 1,000 nursery places). To end the occupation, the council lied to the parents and said they would keep the nursery open. The next month the council closed it. It was then occupied by people who reopened it as a much needed community centre. They were evicted after 3 months. The council lied in court and said that it would not be sold. When the bidding finally started, the price was pushed up wildly by two campaigners bidding against each other, who were eventually removed when the auctioneers twigged. However, instead of re-starting the bidding, the auctioneers simply accepted the highest genuine bid (considerably higher than the site had been expected to fetch). [not sure if this is true – thre are reports of lower bid being accepted – anyone know for sure?]
Meanwhile, council gardeners and estate cleaners objected to the cuts in wages and jobs by staging a one-day wildcat strike on October 12th, coinciding with the occupation of Nelson Bakewell estate agents. One worker said, ‘People don’t know how much they’re earning or how long they’re going to have a job,’ hardly surprising that morale’s down the tube, then. The same worker said there was a feeling that Hackney council want to run an experiment in having a council with no in-house services. Earlier attempts to split services up into ‘trading units’ running an ‘internal market’ led to the collapse of several departments and many job losses as a result of fragmentation, increased bureaucracy and loss of econommies of scale since those units that were successful got no encouragement it was suspected then that the ‘internal market’ was merely an excuse to increase contracting-out.
The council’s attitude to transparency is shown by the events around the council meeting on 25th September. A special meeting was called to debate cuts to funding for voluntary community groups, after the Regeneration Committee had been unable to debate the cuts because all of its members declared a conflict of interest [at least they declared it. Ed]. The published agenda for the meeting said it would concern rescinding of standing order 40 no mention of cuts and you’d have to be fairly well up on jargon or in the original failed meeting to know what it meant. The meeting was scheduled for 10pm, but was moved to 8.30. After a number of councillors had withdrawn, declaring interests, the council moved directly to a vote with no debate. The entire Labour contingent voted in favour of the motion (i.e. in favour of the cuts which could force some voluntary organisations to close. Other councillors challenged the proceedings, particularly the absnce of a debate, but got nowhere.
Meanwhile, good news that Hackney’s schools are to be handed over to a non-profit making trust when the current PFI contract with Nord Anglia expires next July. Although the new body will include a school governor and two headteachers, there have been complaints that it will contain no classroom teachers.
Contact: Hackney not for Sale! email@example.com 07950 539 254
Hackney IWCA spokesman Peter Sutton stated “The council has its priorities all wrong. While they’re slashing the budgets of voluntary groups and closing down our public facilities, they obviously think they can waste thousands of pounds on this type of PR exercise”.
Hackney IWCA has been engaged in a survey (costing nothing!) for the last three months over 20 estates in south Hackney and Shoreditch, asking local people what their concerns are. Topping the list of issues is crime and anti-social behaviour, closely followed by worries over the lack of local facilities – the same local facilities that the council have put on their hitlist to be sold off.
Peter Sutton concludes “Hackney Council are a disgrace. We never see our councillors on our estates anyway, but now they’re paying other people to come round for them – to find out information most people could tell them for nothing”.
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