It just may not work

A lot of this blog has been dedicated to the effects of the government’s reforms to housing, local government and regeneration. We’ve built up a fair picture of the impacts of these reforms on communities and especially those on low incomes or in need.

But have we neglected something obvious: these rapid and dramatic reforms might just not work. I don’t mean that they may have consequences the government hasn’t foreseen but rather they may entirely unoperational for the various bodies that are supposed to enact them. Or interact in such a way that the (affordable) housing system just fails.

I have been vaguely thinking this but Vince Cable’s latest indiscretions, brought it to the fore. He’s quite clear of the possible impacts of the speed and extent of change:

There is a kind of Maoist revolution happening in a lot of areas like the Health Service, local government, reform, all this kind of stuff, which is in danger of getting out of… We are trying to do too many things, actually. Some of them are Lib Dem inspired, but a lot of it is Tory inspired. Actually, the problem is not that they are Tory-inspired, but that they haven’t thought them through. We should be putting a brake on it.

So what might a systematic failure in the housing system look like. A few initial thoughts:

1. Housing associations going bust, potentially caused by a combination of:

  • Housing associations over extending themselves (again), either through their own folly or the HCA/government trying to force too many new units out of the ‘investment agreement’ process.
  • Higher 80% rents which aren’t covered by housing benefit/universal credit creating spiralling bad debt, especially as councils maintain allocations policies of putting the poorest and neediest first (the irresponsible bureaucrats that they are) and housing associations not having the stomach or the ability to evict those that can’t pay.
  • Unstable and increasing borrowing costs and especially changes to the  existing loans that housing associations have – ramping up their existing debts, not even future ones.

2. Housing associations being reclassified as public bodies.

It may seem smart now for ministers to pontificate on CE pay or demand public sector-levels of transparency. It won’t look so smart if the ONS decide housing associations are public bodies and stick their debt on the public balance sheet. the Treasury I guess would stop all borrowing at once to protect the deficit reduction plan and a swift and full privatisation would likely follow. Who knows what mess would fall out of that.

3. A botched HRA reform:

You may have picked up that I’m broadly supportive of the HRA reform as it stands, but I wouldn’t put it past this government to engage in some last minute political meddling – a level of debt councils can’t support or an attempt to skew the debt to help Tory areas, as we saw in the local government finance settlement. This could see House Revenue Accounts going into the red, needing to be topped up from already diminishing council coffers and/or spending on maintenance and management stopping.

4. Planning reform that stops anything being built

This could be because either the policy impact of the Localism Bill does this or because the change and upheaval stops everything dead for a while. Housing, affordable and otherwise, completely grinds to a halt for years to come.

Update: It just occurs to me that of course in a lot of ways the housing system is already systematically failing. Perhaps I mean a failure in such magnitude or of such speed that requires immediate emergency action – such as the action which was taken during the crash to keep the existing system (and its flaws) going.

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