Like many people, I was puzzled by the alacrity with which the National Housing Federation made its Right-to-Buy offer. After all, the chance of this last-minute manifesto commitment going though the Commons and the Lords seemed far from certain.
The whole tenor of the Federation’s offer was that legislation had to be avoided at all costs. Yet in framing their offer to government they failed to consult with the ONS about whether a voluntary deal really would avoid housing association debt being put on the government balance sheet, or whether it really would stop associations being re-classed as public bodies. They failed to consult with lawyers, apparently, (although they have refused to say whether they did or not.) They denied Parliament a chance to scrutinise this part of the Housing Bill, and, above all, they failed to consult with their colleagues in local government, who will be forced to sell thousands of high-value properties (although that requires legislation, which is far from a done deal).
They gave their second-tier members six working days to decide upon a deal based on little more than an act of faith, a leap into the unknown. A deal that would put nearly all housing association homes in the frame for sale or transfer to alternative tenures (read Chapter 3). And they used the disingenuous excuse that a rushed decision was required because of the drafting of the Housing Bill, when we all know that it was required in order that David Cameron could announce in Manchester on the 7th October that, “Greg Clark, our brilliant communities secretary, has secured a deal with housing associations to give housing association tenants the Right to Buy their home.”
In the process the Federation has enraged many former colleagues in local government and split the housing association “movement”. 45 percent of their members were so unimpressed by the offer that they voted against, abstained or failed to vote.
Then, after the vote had closed, ex-Inside Housing journalist Isabel Hardman revealed that she had a “big list” of hostile Conservative MPs who would have stopped Right-to-Buy. She tweeted, “Cameron trumpeting deal between housing associations + Greg Clark on right to buy. But I know of big list of Tories who’d have voted it down.”
Reading all of the above, a puzzled outsider might wonder why on earth this offer was made at all, at this time. A cynic might conclude that the Federation actually wanted an extension of Right to Buy, and the sooner the better.
The situation is doubly puzzling because well before the General Election the Federation had expressed violent opposition to the Right to Buy. In February 2015 their CEO called it a “genuinely stupid idea”. “Of all the daft ideas I’ve heard in a career in housing, this is the daftest”, he said.
On the 14th April he wrote:“The Conservative Party wants to sell assets that don’t belong to them, or to the nation…this is plain bad policy.”
When the Conservative manifesto was published the Federation’s Director of Policy and External Affairs said: “…extending Right to Buy to housing associations is the wrong solution to our housing crisis.”
Even after the General Election the Federation continued to express strong opposition. In The Guardian on the 27th May their CEO said: “It is wrong for government to insert itself and instruct you in what you may or may not do with the assets you own.” The interviewer, Patrick Butler, commented that the Federation “…does not rule out a legal challenge.”
On the 12th June the CEO wrote: “At its heart, imposing the Right to Buy on housing associations is a policy that will deny the aspirations of many, many more people than it will support, …If ever there was a time for Parliament to intervene and stop dangerously bad legislation it is now.”
By the 4th July his tone had started to soften: “We share the government’s ambitions to help people into home ownership, but extending Right to Buy must not undermine housing associations’ ability to build more homes. We want to sit down with government and discuss ways to give far more people, including existing tenants and new buyers, the opportunity to own their own home.”
(I had already heard in early June that some of the larger associations were telling the Federation to ease up on their opposition to Right-to-Buy because they had factored it into their business plans.)
But after the 8th July the tone changed even more dramatically. On the 12th August the Federation’s CEO wrote: “At its best (Right to Buy) has the potential to spread home ownership whilst maintaining the stock of social housing and adding to overall housing supply. …great care must be taken to ensure that housing associations are fully compensated by government…”
So the Federation moved from a position, post-election but prior to the 8th July, where a legal challenge was not being ruled out, and where Parliament had to intervene and stop this “dangerously bad legislation”, to a position post-8th July where Right to Buy was being spoken of as, well, actually, quite a good thing, or at least nothing like the “plain bad policy” they had earlier attacked.
Am I alone in thinking that there is something mighty odd about this shift of opinion?
What happened on the 8th July, of course, was that the Chancellor extirpated the ten-year agreement on rents that had given some degree of certainty to housing association business plans, and reduced social housing rents by 12 percent over 4 years – a reduction that will cut housing association turnover by almost £4 billion.
Some people believe that the Federation was leaned on, both before the 8th July, but much more so afterwards, by some of the largest and most influential housing associations. Could it be that, by their lights, Right-to-Buy had become a potentially lucrative source of funds that could protect their business plans and their empires?
If you read the offer document carefully, it pledges one-for-one replacement, but totted up on a national basis and not by area, by housing association, or by tenure. It makes vague reference to all receipts being used for replacement, but it is not clear how this will be audited. What is to stop an association selling a Westminster property for £1 million, building a £200,000 property in Harlow and pocketing the difference? Selling property puts money into your bank account. Replacing it takes money out of your bank account, but months or years later. Cashflow is king.
More importantly, did these influential associations also want the “freedoms” that are set out in Chapter 3 of the offer, and which were a key feature of the Policy Exchange report launched last November on “Free Housing Associations”? A report, let us not forget, that was supported by several of the largest housing associations and “welcomed” by the Federation?
Was the Right-to-Buy offer the bait that caught the bigger fish – the “freedoms” they wanted, and which were in danger of slipping away if associations lost their present status as a result of the legislative route, (which could be followed by nationalisation and privatisation?) Freedoms which would also be denied if Parliament failed to legilsate on Right to Buy, because that would bring them back to the status quo?
Of course this is all speculation and opinion, and I should make it absolutely clear that I have no firm evidence at all for the thesis I have set out above. However, the Federation’s handling of the offer process has been so divisive and defensive, so politically lacklustre, so little based upon solid evidence or sound judgement, so tantamount to “plain bad policy”, that I have struggled to reach any other conclusion.
But I would be pleased to hear from anyone who can put me straight!
(First published at Inside Housing 12th October 2015)