Burning Bridges

Last September the National Housing Federation announced a voluntary Right to Buy deal with the government, ostensibly as a way of stopping housing associations being re-classified as public bodies by the ONS. The fact that this would require councils to sell off their high-value stock to fund the discounts did not seem to perturb the NHF, who were accused of “collaboration” by a senior local government figure. But the ONS had already decided to re-classify associations into the public sector on the basis of the 2008 Housing Act. This has prompted the government to announce a range of de-regulatory measures that go well beyond the status quo ante and will, at some unknown future date, take associations back into the private sector – a move that has been warmly welcomed by the NHF. The NHF has consistently declined to answer questions about what they knew of the ONS decision, and, given recent events in the Lords, whether it was really necessary to offer a voluntary deal. (See here and here.) So either, the NHF strategy was astonishingly incompetent, or subtly brilliant – I leave you to decide.

The government now plans to extend de-regulation by amending the Housing Bill to limit or remove the ability of councils to “exert influence” over housing associations. That means no more council nominees on LSVT Boards and the removal of any influence on Board decisions. Whether it will extend to issues like nomination agreements time will tell, but having upset local authorities with the voluntary deal you would have thought that the NHF would want to build some bridges with their local government colleagues, but not a bit of it. Their Head of Policy welcomed the proposed changes: “…we are pleased that the government has taken more steps to help our members on this issue”, she said.

My immediate thought was: How to lose friends and alienate people! What is the NHF playing at? At a time when the relationship between housing associations and local authorities is at an all-time low why add salt to the wounds? And what about all those tenants who voted for stock transfer on the promise that their council would continue to have an influence? And who will vote for stock transfer in the future? There are numerous examples of LSVT landlords being swallowed up larger providers and local councillors and tenants losing control of decisions about their housing.

This prompts me to ponder on some serious concerns about the direction the NHF is taking. I’ve already raised the point that the NHF has consistently failed to take a position on CEO salaries and empire-building – two of the key issues that have harmed the sector’s image. But the recent spate of mega-mergers is set to lose the sector even more friends, and add to the risks facing the sector, and yet the NHF is still silent.

Mergers might be a rational response to an irrational world, but the risks involved are significant and could become unmanageable. The “too big to fail” scenario in the banking sector cost the taxpayer up to a trillion pounds. The HCA is proud of the fact that not a single association has gone bust, but that has largely been a function of size. Sanctuary stepped in to absorb Cosmopolitan because they could. But who would or could rescue the new L&Q with 135,00 homes if they go to the wall? And if the government won’t act as a guarantor to protect tenants then that will lead inevitably to a mass privatisation of social housing assets.

Then there are the risks to the NHF itself. An association with 135,000 properties could contribute 5 percent of the Federation’s £8.8 million in annual membership fees. Ten or more monster organisations of that size could account for a majority of the Federation’s fee income and the hundreds of smaller members could end up having no say at all, and then the tail will be wagging the dog. (I don’t need to remind readers that the Right to Buy vote was based on size, not membership).

The NHF is a membership organisation whose mission is “to support and promote the work of housing associations and campaign for better housing and neighbourhoods” and to “put our members at the heart of everything we do”. But you will struggle to find anything in their mission and objectives about protecting social housing assets, The recent warning from the CIH that 350,000 social rented homes could be lost by 2020 went unremarked by the NHF. If a majority of NHF members, by size, start heading in a more commercial direction that is harmful to the sector as a whole it seems the Federation will be following rather than leading. This at a time when the sector rquires effective leadership more than ever.

Fifteen years ago I wrote an article for the now-defunct “Housing” magazine called “Dawn of the Monster Age”, which predicted the arrival of the first 50,000-home associations. I argued that growth and consolidation could be bad for tenants, and that large, monolithic council housing departments were in danger of being replaced by even larger landlords that were less democratic, less accountable and harder to regulate. How long will it be before we see the first 200,000 home association and a sector dominated by major players acting more like commercial housebuilders than social housing providers? If I’m still writing about housing fifteen years from now I do hope I don’t have to write “I told you so”!

 

(This blog first appeared on the Inside Housing site on 19th April 20160

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