The City of Edinburgh Council announced this week that it plans a massive £70m bailout for struggling property developers. This news comes the same week as the Council reports a £92m black hole, and threatens to cut our front line services.
Big private developers involved in gentrification in Granton, Leith, Niddrie, (such as EDI, Waterfront Ltd. and PARC) are struggling with large debts, and a lack of finance, for their ambitious 'regeneration' projects.
The City council can get loans cheaper than these developers, and so plan to bail them out to the tune of £70m. These companies are owned by the council, yet remain private companies.
The council aims to merge these "arms length" gentrification companies into an entity they have set up called CEC Holdings Limited, and are borrowing millions to purchase the majority of their property, which includes the "regeneration" flats of granton and craigmillar.
The Council will, in effect, be taking on all the debts and liabilities of these firms, debts which are in the millions. This makes a joke of the idea that they are "arms length" companies.
With a social housing crisis in this city, this is an interesting development. A council that looks after its residents, would certainly use this as an opportunity to meet the social housing shortage. How many, if any, will be made into social housing? The answer is none.
There are on average 150 people bidding for each council home that becomes available. There were more than 400,000 bids for 2,700 homes, on the EdIndex system for housing allocation, last year.
This is a city in dire need of social housing - but as usual the council is prioritising the needs of wealthy developers over the needs of Edinburgh residents.
A better plan, would be to let them all go into administration, then buy the property dirt cheap from the administrator without any of the debts and liabilities. They could be made into council housing, solving our social housing crisis.
But this wouldnt suit the neo-liberal priorities of the council. There is instead a policy of outsourcing the cities social housing needs to "arms length" private companies, with all the problems that entails.