Just published is a book on non-profit organisations by a committed group of community workers; it includes two chapters by Charles Fraser, the first on his 20 years as CEO of St Mungos grappling with different governments to develop services for an unpopular group, single homeless people. His second piece criticises the role of large housing associations, suggesting changes.
Red Brick is delighted to re-publish the second of these chapters below.
The book “Innovation and Change in Non-Profit Organizations” was edited by Don Macdonald (former CEO of the Foyer Federation).
Other chapters cover campaigns (Windrush, Women Refugees), community development, leadership and management and quality improvement. Contributors, all respected practitioners in their fields, include Patrick Vernon (Windrush Campaign), Marchu Girma (Women for Women Refugees), Sian Lockwood (CEO Community Catalysts) and Shaks Ghosh (CEO Clore Social Leadership).
Getting Back to Being Connected: How Housing Associations Should Change
By Charles Fraser
For 35 years after the war, the responsibility for building new homes on any scale rested with the private sector and local councils. The high point of council house building was reached in 1953, when 220,000 homes were built. 1978 was the last year when the total number of new homes built (private sector, council and housing association) reached 250,000.
While new public house-building was seen as the job of councils, housing associations had a different purpose. Social reformers and philanthropists had played a pioneering role in the 19th century in developing high-quality housing for the working poor; this provision was not that extensive, with the result that by the 1960s many households had no option but private sector landlords, some of whom were notoriously exploitative. A new grass-roots social activism emerged in response to this, where locally credible groups competed with these landlords in order to provide housing free from harassment and overcrowding. They formed housing associations, and surfed the wave of determination to tackle the cruel human consequences of housing shortage which had been so vividly exposed in Cathy Come Home. They were close to the communities they served, as could be seen in their names (Notting Hill Housing Trust, Brent People’s HA, Paddington Churches HA etc). The cornerstones of their professional and emotional appeal were good quality housing, community engagement, hands-on management and human-scale accountability.
A step-change took place in 1980 with the election of Mrs Thatcher and the introduction of Right to Buy: between 1980 and 2013, 1.6 million council homes were sold. More than that, they were not replaced – councils stopped building. By 2016 just under 8% of us were living in council housing (compared to 42% in 1979). By the 1990s housing associations were being encouraged by government to assume the responsibility for building public housing, and, under political pressure to cut public spending, government also expected housing associations to compensate for reduced grant levels by borrowing private money – a precursor to the rather idiotic and lazy slogan of ‘more for less’, one consequence of which was to significantly curtail risk-taking.
Backing the housing association sector became ideological, but not just along party political lines: the Blair/Brown governments of 1997–2010 only built 7870 council homes. Housing associations did a reasonable job of delivering new housing, within the limits of available finance; but their supply was inevitably not adequate to the demand. For decades Britain has produced insufficient housing to accommodate not just population growth but also the changing demographics of household composition. Politicians have been slow to understand the imperative of new housing supply, and ideology has held sway over action. It is widely accepted that about 250,000 new homes need to be built each year in England: since the turn of the century the average has fallen about 75,000 short each year.
It is now quite common to hear complaints about housing associations being remote, empire-building megaliths, interested much more in development than in management. But if housing associations are so unloved, why is this? There are, of course, a variety of reasons – a belief that size has not generated efficiency of scale but remoteness and an uninterested arrogance; instances of poor quality workmanship in new-build and then, critically, an unwillingness to take complaints seriously, take responsibility and put things right; an insensitive bureaucracy; and that old perennial, poor maintenance. Perhaps underlying all of these is a disappointment that they so willingly forfeited any sense of independence, and acted largely as sub-contractors to the local state, which swallowed up all the nomination rights to new lettings.
Some of the charges do justifiably stick. With their stupid ‘re-branded’ names and vacuous assertions about tenants/services/communities ‘being at the heart of all we do’, one is right to be unimpressed, even suspicious. But at the same time one needs to beware of a simplistic approach which equates ‘small’ with ‘good’ and ‘large’ with ‘bad’. It is not the fault of large housing associations that government abandoned its role of funding council housing. That withdrawal left a vacuum which housing associations have partially filled. It was government which collapsed the grant rate, forcing associations to borrow privately. Avoiding a default became the absolute priority of the regulator so as to ensure that all the wheels didn’t come off the sector’s credibility with private lenders. Big associations do use their financial muscle to build new homes, and a good thing too – but isn’t that the least that they should be doing with financial muscle?
The problem perhaps lies in the fact that the sector (and the regulator) has allowed power and influence to flow from spreadsheets – the number of units; the asset base; and strong cash flows – rather than from successfully identifying what makes associations different from other housing providers, and then strengthening that. Tenants risk simply being viewed as rent-paying units. At the same time there is far too little protest about the relentless cuts in government funding – down (for example) from £11.4bn in 2009 to £5.3bn in 2015 (a reduction of 47%!) –as well as cuts to ‘adjacent’ services (e.g. health and employment) which are so critical to the prospects and well-being of their tenants. The sector has lost any radical edge it had, and is felt by some to be too cosy with governments which do not put housing, or people, first.
Then Boris Johnson lobbed a pebble into the pond: when he campaigned to become Mayor of London, he struck a chord when he complained that the label of ‘affordable housing’ was applied too narrowly to housing for people on low incomes or state benefits alone and that, given the high cost of housing in London, it should be extended to (for example) young couples with a joint income of up to £60,000. As the ‘cake’ was shared out more widely to address this hitherto unheralded example of housing need, it was inevitable that some resource would be diverted from building for social rent. The sweetener for associations – but not tenants! – was that ‘affordable rent’ was defined as a rental level up to 80% of market rent.
I do not pretend to have an insider’s understanding of the funding models of large housing associations. Many of them seem to have raised money using very complex financial instruments: the business model is paramount. But there is an issue of mission drift: in 2015/16, out of almost 190,000 new homes built in England, only 6500 (3.6%) were for social rent, i.e. low-cost housing for people on low incomes. A year later the comparable figure was below 5400, or 2.5% of all completions. It looks as if the profits from developments for sale on the open market are going to ‘affordable rent’ programmes rather than to social rent, and that people who need social rent housing are being left to the tender mercies of the private sector.
It is not completely fair to criticise all large housing associations for being in some ways unresponsive. Some have been genuinely innovative, and have sought new approaches to the rapidly evolving needs of their tenants. And yet, and yet … there is a problem. It lurks within the very terminology ‘housing association’. The term covers too many disparate types of organisation. It is very hard to see what it is that links together a large association, a medium-sized one and a small specialist one – beyond a commonality of constitution and a common (but ‘one-size-fits-all’ and unimaginative) regulator. ‘Association’ is defined as ‘a connection or cooperative link between people or organisations’, or ‘uniting in a common purpose’. It is increasingly unclear how that concept applies to housing associations – should there be a commonality of purpose between landlord and tenant? That seems to be increasingly rare. Customer care programmes and call centres may well have cut costs, but they are extremely impersonal, and entirely unaccountable. They only partly answer human-scale needs.
We seem to have forgotten that housing is not just about bricks and mortar, it is about people. In the early 1980s some London local authorities still had housing welfare officers, whose job it was to help new tenants deal with practical issues so as to aid their settling in. That seems like a very distant dream today. Housing associations with their roots in the 1960s were not set up in order to build an asset base – they were a front-line, humane response to the abominations of landlords like Rachman, offering security of tenure and dependable housing management. One of the great lies of recent times was the fatuous assertion by the DoE (as it then was) that it was ‘the department of place’ – all government departments are departments of people, and it behoves them to remember that fact.
Are housing associations private or public?
An interesting question is whether housing associations are private or public organisations. The answer varies, and will depend on the size and focus of each association. The reality, though, is that nowadays most housing associations are indistinguishable. They have lost local connectedness, which does not mean connectedness with an area on Google Maps, but with real people living in a locality. While it is true that the big associations re-invest their profits – sorry, ‘surpluses’ – into providing more units of housing, they behave in many ways like private housing companies. Nothing wrong with that, perhaps, but it then becomes questionable whether they can justify their charitable status, especially since most of them pay their board members. It looks more and more as if ‘charitable’ describes their privileges, not their obligations.
The supported housing sector (‘supported housing’ refers to the integrated provision of housing with support, which can sometimes be so intensive as to border on care) has been struggling badly due to unsympathetic government and generally uninterested (and sometimes downright hostile) local government, but there is precious little show of solidarity between the different ‘wings’ of what likes to portray itself as a single sector. Indifference does, though, seem to have been sanctioned – the regulator has failed to promote the wellbeing of small and medium-sized associations, and especially specialist supported housing providers. But then this is the same regulator which has consistently refused to countenance any nuance of designation, which in turn has led to the endless idiocy of small supported associations being exploited by their larger, property-owning ‘peers’, and of being assessed by the regulator against criteria which are patently irrelevant.
Perhaps this is not all the regulator’s fault – after all, it was central government which abdicated its responsibilities in 2003 by handing control of funding streams for vulnerable people to local councils, despite pretty clear evidence that they had a negligible track record in assisting the client groups which are covered by that rather unforgiving label. What started off as a ring-fenced fund of £1.8bn had by 2014 become an un-ring-fenced fund of £1.6bn.
Many councils took proactive steps to cut the funding further. Nottinghamshire was one of the most celebrated and brutal councils: an SP budget of £27m in 2004 was cut by 65% in 2012; a further 35% cut was planned for 2014, leaving an overall budget of £8m in 2017. Derbyshire cut its budget by 81% over three years. These were by no means the only councils which, when faced with the need to save money, visited savage cuts disproportionately on those least able to fend for themselves. Local government claims to be the natural strategic housing body, a claim which is tested by the fact that homelessness has risen by 169% since 2010. The great difficulty for the providers caught in these cross-hairs, of course, is that organisations which seek to support people who fall between the gaps in services are themselves likely to fall between the gaps in funding. It is a cruel irony that supported housing should be cut when it saves money: the problem is that it saves money to the public purse, rather than only (or mainly) to its funder. Thanks to the embers of localism, the local tail wags the national dog.
These cuts matter, for two reasons. First, supported housing providers work with and on behalf of those whom mainstream housing associations choose to ignore; second, they maintain a close relationship with their clients, thereby ensuring the sort of connectedness and advocacy which the best housing associations once promoted more routinely. By working with marginalised groups, however, these providers risk themselves becoming marginalised. We are frequently reminded of the benefits of communities, without seeing their drawbacks. I recall a colleague from a homelessness agency who sought planning consent for a development of six flats in central London, for which the council received 840 written objections! Apart from the obvious disappointment in realising that 840 people had such strong feelings against homeless people that they were moved to put pen to paper, this does raise compelling questions about the validity of a planning system which is so immune to social progress. Is there a case for taking social housing developments outside the remit of the planning framework? But of course communities rarely define themselves by what they are, and much more frequently by what they oppose. They are intrinsically excluding: and it is at least arguable that social innovation takes place despite communities, not thanks to them.
This is why it is important to have organisations which ‘smell the cordite’, that is, which are able and willing to stand up to powerful interests on behalf of their client groups, and which are able to harness the talents and experiences of their client groups in themselves helping to shape the services they receive.
I am not trying to argue that ‘small is beautiful’. Just because an organisation is small does not mean that its connections to its client base are exemplary: on the contrary, small organisations are just as capable as large ones of being manipulative, ineffectual and self-important. The important factor is the quality of their relationships with their clients, and then whether those relationships assist their clients towards Maslow’s notion of self-actualisation. At its best, that is the strength of the voluntary sector.
It is beyond doubt that there are sub-sections of the population who have been left behind. The cliché declares that ‘a rising tide floats all boats’ – not if they are holed below the water-line it doesn’t. These sub-sections have been failed: they have been failed by public services; they have been failed by the market; tragically, they may also have been failed by their own families. The voluntary sector, in the form of specialist supported housing providers, may well represent their best (and last) chance of having a future.
And it is here that the large housing associations can have a valuable role to play. They should stick to what they do best – but they could and should offer more practical assistance and financial support to their more precarious colleagues in the supported housing world who are trying to maintain that connectedness with their clients in housing need (and ‘financial support’ does not mean clever wheezes to make a quick buck out of them!).
What matters is almost always that which cannot be counted. When George Peabody established the Peabody Donation Fund he declared that the aim of the organisation would be to ‘ameliorate the condition of the poor and needy of this great metropolis, and to promote their comfort and happiness’. Promoting happiness would be a noble goal for today’s housing associations – but are any of them up to the challenge?
Charles Fraser was CEO of St Mungo’s (1994-2014). This chapter is from Innovation and Change in Non-Profit Organisations, Ed. Don Macdonald, Pavilion Publishing and Media Ltd, 2019.