Crossroads or Dead End?

Before Blue Labour there was Red Tory.  And the think tank ResPublica, directed by the original Red Tory Philip Blonde, has just published an important report which they claim sets out ‘a progressive future’ for housing associations (HAs).   

ResPublica says that “At the Crossroads” is a radical new vision for HAs in which they would take on a much wider service role, bringing the big society themes of mutualism, localism and community ownership into the housing debate.

To be fair, the report is well written and well-researched and has a lot of interesting things to say about the work housing associations already do in communities, with some excellent examples of innovative work providing local services, supporting and funding community organisations.  I like the idea that HAs should declare a ‘social dividend’, but the rest of it is scarcely new.  There is no trend analysis of how community investment by HAs has developed over the years (slowly and often backwards) or of the retrenchment that is going on now.  It doesn’t properly consider the example of care services, a key role that HAs have taken on where there are huge cuts in many areas currently.  It argues a good case for the rationalisation of stock, devolution of management, and improvements in tenant engagement and control, but this is also a well worn path.

The report gets more challenging in its discussion of governance and the options for community control, arguing that associations that adopt new forms of community accountability, especially through active shareholder participation, should qualify for further deregulation, claiming that they would be ‘set free’.

Despite trying to be unremittingly positive about the coalition’s policies (and failing), the report is deficient on several counts.  It acknowledges that coalition policies will cut development, but it has virtually no analysis of the role of HAs in providing homes for people in housing need, which is of course their primary purpose for being.  It is hopelessly optimistic that HAs would be transformed by extending shareholding, not recognising that shareholders have few rights and little power, especially as Boards invariably control large numbers of proxy votes at AGMs. 

I can see the model working, indeed would welcome it, for smaller or geographically based associations.  I would welcome mass membership of such organisations, the much wider development of mutuals, and a huge extension of tenant influence.  But it ducks the challenge posed by the least accountable and most problematic HAs – the very large associations who own a major proportion of the stock, work in dozens and sometimes hundreds of council areas, and are hugely complex finance-driven organisations.  It is not just a matter of devolving management, the financial centre would always retain control.  They would have to be broken up and I can’t see that happening, especially as some are hell-bent on becoming plcs not community organisations.   

The form of deregulation that the report says should be on offer to HAs that adopt the community model is also extremely dangerous.  Organisations that are community influenced or indeed community controlled can fail just like others can, they embody large amounts of public resources and should be subject to external regulation to ensure they are meeting their purposes and maintaining efficiency and probity.  Good organisations should welcome good regulation and not see it as red tape or some unfortunate additional cost.  Localised tenant scrutiny is a good thing but it is open to manipulation and has no chance of working unless a lot of resources are thrown at it.  It is not a substitute for external regulation.  The history of HAs is full of chief executives who talked a good service until the inspectors called and revealed the reality.

It is also important to look at what ResPublica mean by HAs being ‘set free’.  Localisation of rent setting.  No thanks.  Use of flexible tenancies.  No thanks.  More flexible use of historic ‘recycled’ grant.  No thanks.  Converting existing homes to flexible tenancies.  No thanks.  These are not freedoms, they would amount to tenants giving away their rights.  

It is hard to predict what will happen to HA finances under the new regime.  Those that will build anything anywhere because they are little different from private developers may see rising rents and more cash to spend, but they are the least likely to give themselves over to community control.  Others foresee less development and therefore a reduced ability to spread their overheads, leaving less money to spend on anything but the basics.  If the money isn’t there, the community extras will gradually be stripped away and no amount of big society coalition-speak will make any difference.

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2 Responses to Crossroads or Dead End?

  1. Pingback: The future role of housing associations « Progressive Middlesbrough

  2. Stephen Cook says:

    I think you raise some valid concerns, but there may also be opportunities to do something more imaginative than the traditional HA-tenant relationship. The cohousing group that I’m involved with is exploring what can be achieved through partnership with an HA. So far, it looks positive. On the other hand, go-it-alone cohousing (or any other mutual structure) in south-east England looks extremely challenging, especially in terms of financing the “affordable” component of a cohousing scheme.

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