During this year’s party conference season we’ll be addressing two issues affecting the housing sector, writes housing association, Moat.
The first will come as no surprise, since welfare reform is to prove one of the biggest shake-ups that we’ve seen in a generation, and its timing – when the sector already faces a crisis of funding and build capacity – couldn’t be worse.
We recognise the need to reform the benefits system, and are supportive of most changes in principle. However, some of the reforms (as they currently stand) will have unintended consequences. Our interest is in ensuring that welfare reforms can proceed without harming future house building capacity.
The Department for Communities and Local Government (DCLG) and the Department for Work and Pensions (DWP) are currently working in opposite directions and some of the ‘rougher edges’ of welfare reforms threaten to lower build capacity. There will be unintended consequences from April 2013 even beyond this reduced build capacity, and the starting point for policy should be the efficient use of housing stock rather than financial savings to the Treasury. The balance is not currently right - investors are being spooked by the prospect of higher arrears and the sector’s risk profile is likely to be impacted. Higher risk equals higher borrowing costs, which leads to a further reduction in build capacity.
Equally risky to investors is the potential removal of the link to inflation. This lack of indexation may become unworkable under the existing housing association business model which is calculated over a 40 to 60 year period. Currently, over time, inflation brings the net rent above the cost of building the home. Without this inflation link, house building at current levels cannot be sustained.
The second issue we want to address this autumn (and beyond) is social housing’s measurement of success, which needs a rethink. The clue’s in the name, we need to look at our social contribution and the value we add to the society and communities in which we work. Affordable housing is a sound use of public money, and housing providers should be encouraged to act innovatively to obtain even greater value from subsidy.
A performance indicator setting out arrears targets, for instance, says little about how an organisation’s social purpose is achieved. Instead, look at how many residents are supported from subsidised into unsubsidised tenures; at the success of partnership initiatives to challenge worklessness; and at how social value is provided through housing services and management. This is what we’re planning to discuss during party conference season – how housing providers can work together to transform the thinking behind success from corporate to common sense.
2012 has proved an important year for housing – the sector is finally receiving the attention and discussion it so desperately needs and deserves. This year’s party conferences are the ideal opportunity for providers to prove they are ready and willing to adapt to survive.
Moat is holding fringe events at all three party conferences "A balancing act: reforming welfare while addressing the UK housing crisis".