Leader of the Labour group on Peterborough City Council Cllr Shaz Nawaz:
The last full council session of the summer took place on July 25: councillors voted on the proposed budget as well as measures intended to address the housing shortage in Peterborough.
The Labour Group abstained on the budget; we’re not confident that the underlying assumptions in it are robust, despite the current administration’s protestations to the contrary.
Also, we couldn’t support the housing proposals. One particular comment sticks in my mind: the council has £16 million to spend, and Councillor Cereste stated that a private firm was willing to bring in an additional £16 million.
He stated that it was as straightforward as two plus two equalling four.
I’m sorry to disabuse Councillor Cereste of his understanding of mathematics, but perhaps he should recall a phrase that was a favourite of one of Margaret Thatcher’s favourite economists, Milton Friedman: “There’s no such thing as a free lunch”.
No business is going to “give” £16 million without expecting a return. That money is being loaned for the purposes of accruing profit; and often, private profits and public benefit are not one and the same thing. £16 million plus £16 million may look attractive, but it does not necessarily make a good deal.
Furthermore, I’ve yet to see evidence that Cross Keys are injecting £16 million into Medesham Homes.
The council should be more ambitious in its approach: imagine that the council got into the business of building houses.
Assume that the council would commit to building 250 homes per year. Let’s also say that a large percentage of these houses would be social housing, the rest would be sold on the open market; there is the tantalising possibility that this venture could facilitate the construction of social housing without the involvement of a third party.
I have proposed this scheme to a number of well-placed parties; the feedback I’ve received suggests that the mathematics are sound. Peterborough City Council could in effect set up a profit-making venture, but rather than use the profits to satisfy shareholders, it could utilise the revenues for public benefit. If the scheme is successful, it could not only address the continuing housing shortage, but social housing could provide a useful baseline for rental costs throughout the city.
Given this, why do we have to continue to rely on the strange maths that the council proposes? In a word, ease. It’s much easier to give the business to a third party than get one’s hands deep into running such a business.
But, if we own assets then we strengthen our position.
We should not be selling the family silver: our job is to create a council that is secure, successful, and sustainable. In order to do this, we have to put the best interests of the people of Peterborough first.
We need to think big during these challenging times, and be bold as well as pragmatic. I urge the council to abandon the peculiar maths; let’s get to work.