What do recent events at News International and the banks have in common with affordable rent conversions in 2011, PFI contracts in 2002 and Community Land Trusts? The common factor is trustworthiness – having it or lacking it. All of these matters have tested the trust we place in our key institutions and, as Housing Associations plan for their future, the question is raised about what they can be trusted to do in the new world of short tenancies, light regulation and ‘affordable’ housing.
The last few years have seen a shift of emphasis on the part of Government, local authorities and housing associations away from housing those most in need towards providing for the ‘intermediate market’. The replacement of social rent with intermediate (or ‘affordable’) rent as the main form of subsidised housing continues the pressure on associations to maintain production of housing, even if the housing is progressively less affordable. It was clear at the National Housing Federation’s Development Conference in July that there is currently much angst amongst Boards and officers. It begs the question ‘what are associations for?’
One answer is that they exist to provide homes to people in need, and to deliver high-quality landlord and support services to residents. Their mission is charitable and their culture is one of public service. That was certainly true in the first two decades of significant growth by associations after the 1974 Housing Act. Since then, most associations have maintained the same mission but broadened their public-service culture to one which combines a desire to deliver good services with a business-like approach. We have grown from being charitable and amateur to being charitable and professional.
But with the drift away from true affordability, and the understandable desire to keep developing, with larger proportions of programmes being market sale to generate cross subsidies, some might argue that the shared culture is changing. If 60% of the development programme is market sale, 30% is intermediate/affordable rent and 10% is target rent, then after 5 years, what will be the prevailing culture?
The culture of an organisation is primarily set and maintained by its Board members. I’ve sat on the Board of four associations, and have seen it in action. But members come and go, and the expectations and approaches of the Boards change over time. Perhaps an even stronger influence on association’s culture from 1974 until very recent times has been the regulator, the Housing Corporation. It exercised a very powerful national influence over all housing associations and, in my view, has been the biggest single reason why the wide variety of associations of different sizes, locations, specialisms and age have had such a remarkably consistent, shared culture at any one time. There is now a question mark over whether the new regulatory regime will be able, or even willing, to do this. As News International and the banks have shown, when organisations have to compete hard to grow and survive, any public interest remit they have gets sacrificed over time in the absence of effective regulatory control.
This is an important matter because it raises the question of who will be the guardian of public interest and service. I believe that association residents should have a right to good service, even though they have next to no commercial or statutory leverage, particularly on the quality of tenancy and estate management services. Without the opportunity to ‘shop elsewhere’, what ensures that they are treated well? Contractual obligations to the HCA as funder?
About 10 years ago I was negotiating PFI contracts, with their long and detailed clauses, trying to define service standards and performance targets. The contracts were over 200 pages long, and I knew that they still couldn’t pin the PFI contractor down to ensure that penny-pinching wouldn’t adversely affect the resident’s experience . We developed an alternative approach with a 24 page contract. This meant that instead of (ineffectively) setting service standards by contract clause when dealing with housing associations, the client could rely on their culture of consumer interest and trust – backed up by an effective regulator. That’s why health trusts, local authorities and others who need to deliver a high-quality service, feel more comfortable with housing associations than private companies. They have greater reliance on the association wanting to do the decent thing, and not always looking for ways to save costs.
The strongest guardian against poor service delivery is a culture of desire. We can continue to look to our Boards for that, but cannot expect them to be an unwavering bulwark as the years go by. Suffering strong commercial pressures, relieved of the ‘burden of regulation’, will some associations elevate their ‘producer interests’ over their residents’ ‘consumer interest’? Will we see a noticeable cultural divide between associations over the next decade?
If we do, does it matter? Maybe not, although we have derived strength from being ‘a movement’ in the past. Our voice will be weaker if it is fractured, and that’s important if it means we are less effective at making the case to Government for the need to address and meet housing needs. It’s not us that suffers, it’s the disposed and unfortunate – again.
In the 1960s housing associations were the grass-root campaigners trying to improve the world, because the established providers (local authorities) were not meeting needs. Twenty years later, the Government handed lead responsibility for meeting housing needs to associations, and froze local authorities’ out of the game. Fast-forward ten or so years from now and where will we be? Will Community Land Trusts, or some other grass-roots, needs-focussed young organisations be growing rapidly in size and capability? Will they be complementary or competitive? It could be interesting, and it’ll depend upon whether we have vacated the hard-won ground of combining public service commitment with a commercial approach. We lose our culture and the public’s trust at our peril.