Cover Story: New campaign to fight for social housing’s future

SHOUT at the devil

For too long social rented housing has been the tenure that dare not speak its name, but now a small group of housing professionals have broken ranks to challenge the silence – and demand it be rebuilt as an essential public asset

By Mark Cantrell

From Housing magazine, April/May 2014

A long time ago, at the Peckover Street conference in Bradford, a rallying cry was heard that heralded the birth of the Independent Labour Party (ILP) – the antecedent of Ed Miliband’s party today – that set out to win political representation for working class people, and with it the reforms necessary to improve their lot in life: “It’s time we had a party that will.”

In a sense, the founding members of the Social Housing Under Threat (SHOUT) campaign have picked up that rallying cry, or at least its echo, but their aims are less overtly political and more tightly focused: they are looking for a party that will acknowledge social rented housing as a public good, and which will endeavour to save it as a public asset for current and future generations.

That may or may not be a tall order. In a more immediate sense, SHOUT answers a ‘call to arms’ issued last year in the Guardian newspaper (16 December 2013) by former Labour housing minister John Healey MP, who effectively challenged the sector to show some guts and fight for its future.

“If social housing’s own won’t stand up and speak out loudly, then present [government] policy will prevail by default,” he said. “Eighteen months out from the general election, we need to refresh and remake the case for public housing. That’s why I ... will continue to campaign in parliament. But politicians can only get you so far and it will be a wider swell of pressure from those who believe in the economic and social case for public housing that really matters. For those people and organisations, it’s time to stand up and be counted.”

SHOUT intends to count a great deal and make its collective voice heard – loud and proud. Although Labour is the primary target of its lobbying efforts, when it comes to finding the ‘party that will’, the colour of the rosette is neither here nor there.

“The main focus is going to be on the Labour Party because that’s where most of the potential for action is,” said Colin Wiles, a columnist and independent housing consultant, who is also one of the founding members. “But one of the things we’re aiming for is to go back to that kind of post-war consensus where both Conservative and Labour parties were almost competing with each other to build the most homes – and the most affordable homes – and that’s what we want to get back to. We are a cross-party campaign and we do want to appeal to all sensible people across the political spectrum.”

The ‘we’ at present consists of Wiles, along with Alison Inman, Tom Murtha, Kate Murray, Aileen Evans, Martin Wheatley, and a few others. Together they form the steering committee, which is currently putting the organisational structure in place. A formal launch is planned for next month, and in June SHOUT will be taking its message to the Chartered Institute of Housing (CIH) conference and exhibition.

“It’s early days as yet but we did feel that it was urgent and that we needed to do something quickly,” Wiles added. “The view we all took is that social housing – or social rented housing, which is really the focus of the campaign – is a most precious resource that’s been built up over generations. Selling it off without replacing it is very short-sighted and it’s going to add to the numbers of homeless and also add to the housing benefit bill.”

The campaign may be in the embryonic stage, but with its submission to the Lyons Review, authored by Wheatley, it has clearly and succinctly placed its cards on the table.

The submission is pretty much a ready made manifesto for social housing (see below); one that is open for any party to pick up and run with. The core of it is the simple premise: to end the residualisation of the tenure.

“We don’t want social housing to become residualised, as in just housing the most needy and the poorest, because that’s part of the narrative that’s come up about social housing being a place for ‘losers’ and being stigmatised,” said Wiles.

The document claims that the Lyons Review’s stipulated target of 200,000 homes a year by 2020 cannot be achieved unless 100,000 are social rented homes. Moreover, so much else depends on increasing the supply, not least welfare reform and the efforts to drive down the housing benefits bill; making ‘social’ housing more expensive via Affordable Rent just doesn’t add up, as far as SHOUT is concerned.

“’Social housing’ must mean housing at rents comparable to traditional social housing rents. The ‘Affordable Rent’ tenure introduced under the current government is not in fact affordable for hard-working families, it cannot be financed sustainably by social landlords, and it is poor value-for-money for the taxpayer,” said the document.

“We can afford 100,000 new social units a year. Its cost is equivalent to just a few days of welfare spending. Even if the entire £4.5bn a year cost beyond current housing capital had to be found within spending totals, it could be accommodated. In fact, the net impact on public spending totals would be significantly reduced by savings on welfare, health and other programmes, and the provision of units by private developers through s106. It would be an investment which could carry on producing benefits to the taxpayer and society indefinitely.”

Where there’s a will there’s a way, and in its quest for the ‘party that will’ save social housing, SHOUT is laying bare the heart and soul of the Labour Party, given the echoes of its founding idealism; in another sense, however, it also invites the Conservatives to undertake some serious soul-searching. The Conservative Party, after all, has long prided itself on being the party of business, supportive of the entrepreneurial spirit, the stewards of sound economic management.

With its ‘manifesto’, SHOUT has effectively presented Conservative ministers with the opportunity to peruse a business proposal for investment in the essential infrastructure supporting the enterprise that is the United Kingdom; a chance to prove the mettle of their self-image as shrewd and rational managers of a modern economy.

But, of course, it’s not just about the economy; there’s the notion of the good society, too, one that strives to meet social need for all its citizens. Taken together, you’d think there’d be plenty there to unite both Conservative and Labour alike to a common cause.

Wiles added: “We think social housing is worth preserving because it has a good track record and it’s housed millions of people. Selling it off cheap without replacing it is going to cost the country in terms of added homelessness and housing benefit.

“A lot of properties that have been sold under Right To Buy are now being let privately at much higher rents and therefore the people in them on housing benefit are having to claim higher levels of housing benefit. We think that’s a mad situation when you could have retained those properties at lower rents. If people wanted to buy, they could have bought elsewhere.

“The whole thing is a false economy in our view. So that’s what we’re campaigning for: we think it’s worth preserving before it’s too late.”

# # #

Demand and deliver

SHOUT’s submission to the Lyons Review sums up the campaign’s essential purpose. It has made a number of key demands, in what amounts to a line in the sand for social housing. Those key points call on any future Government to:

• Provide grant funding at adequate levels to deliver social housing at a standard and scale that “makes a difference” to housing need. Doing so will control levels of debt and keep rents at affordable levels, while saving public expenditure over the long-term by bringing down the housing benefit bill
• Remove or raise “significantly” the HRA borrowing caps to give councils real freedom to build new social housing
• Government must set a target of surplus public land to be made available for social housing at low cost
• Any new towns or garden cities must contain a “significant” amount of social housing
• Social housing to be “properly regulated” so that “high quality management” can be encouraged and tenants involved to the degree of their choosing
• To continue basing social housing rents on an affordability formula
• To refrain from describing ‘Affordable Rent’ homes as social housing. To call it such is “misleading” and it “contradicts the Government’s own definition”
• The Affordable Rent programme in its present format must be “wound down” and replaced with a programme to build social housing
• Any future government must address land and supply issues to drive down the overall cost of housing provision
• Social housing must be viewed as a “tenure of equal status” to others
• The loss of social housing through Right to Buy, voluntary sales, and conversion to ‘Affordable Rent’ should be ended, unless there is a like for like replacement
• End the “stigmatisation and demonisation” of social housing and the people who live within it
• Registered providers should refuse to sign up to the ‘Affordable Rent’ programme in its present format

(Source: SHOUT submission to the Lyons Housing Review, February 2014)

First published as the cover story for the April/May 2014 print edition of Housing magazine. It was subsequently re-published on the Housing Excellence website, 30 May 2014

Interview: Geeta Nanda, Thames Valley Housing Association

It turned out fizzy in the end

Geeta Nanda’s tenure as chief of Thames Valley Housing Association began in a baptism of fire when the credit crunch struck, but as she tells Mark Cantrell, for those organisations willing to embrace change, there are lessons to be learned in turmoil 

First published in Housing magazine

YOU might say, wryly, that Geeta Nanda (pictured) certainly picked her time. When she took the top job at Thames Valley Housing Association (TVHA) back in 2008, all of the old certainties were to be swept away in the sudden calamity of the credit crunch.

At the time, she recounted, TVHA had its largest ever sales programme on the go – over 600 shared ownership homes – and then the “bottom had fallen out of the market”. For Nanda it was certainly a baptism of fire.

“We were all working through the fact that we’d had a big bang, and a big change had happened; you have to roll your sleeves up, place your feet on the ground and work through that,” she said. “So, it was an interesting time to come in to an organisation as a new CEO, but it was good as well because everybody really worked together and we came through it successfully; sometimes you learn the most when an organisation works through problems, rather than when everything is plain sailing.”

In a sense, it’s all been something of a microcosm of the wider housing sector’s experience; those seismic shifts have demanded a fleetness of foot to stay balanced.

“You have to be much more innovative and creative; you can’t do things the same old way because the same old way doesn’t work,” Nanda said. “You can’t have a five year plan which you check every year is working; you’ve got to be a much more dynamic organisation that solves problems and looks for solutions as you go along, to see where the opportunities are, to think more creatively about how you are going to solve them.”

With the launch of Fizzy Living in 2012, TVHA has certainly been putting that creative outlook into practice by becoming one of those organisations exploring the frontiers of diversification to create a ‘mixed economy’ of housing.

Fizzy Living is a commercial venture, a subsidiary created and owned by TVHA, that aims to provide professionally managed market rental homes to “aspirational young professionals” who are otherwise priced out of the conventional private market. What the tenants get is a good quality, well-managed home at a market price they can afford; what TVHA gets is a brand it can build upon, a lever for investment into the business, and an income stream from the profits that can be ploughed back into the mainstream social housing business.

“When we set it up we wanted to have attracted significant external investment into the business within two years – and we’re on track to do that,” Nanda said. “We didn’t want to use our own borrowing balance sheet – our social housing assets – to borrow against in order to build private rented sector [properties]. What we wanted to do was attract in significant investment into a platform that we’ve developed.

“That’s what all investors are looking at: they want to see a model that works, something that they want to invest in, [where] there is a team that can deliver it. The whole thing, for us, about setting up a brand and a platform for Fizzy Living was to make sure that we attract that investment, so we could expand it massively without impacting on our ability to produce more affordable homes.”

Such commercial vehicles – and TVHA is by no means alone in experimenting with such enterprises – are a source of misgiving in some quarters as a potential diversion from the core social business, but Nanda is adamant this doesn’t have to be the case.

“We are very clear about why we’re here and what our social purpose is, and every association I speak to is clear about what their purpose is. What we will have to do is find different ways of making money in order to feed that social purpose and I think that is what organisations are doing,” she said.

“Housing associations have been around a long time and over that time there’s been different grant regimes, different rent regimes, but there’s always been a very strong purpose. I think that purpose is still there; that we widen out who we house just reflects the fact that we’ve got a very different market now.

“There’s a lot of people that do need housing, and there’s a massive need to build more homes and the economic benefits of housing are huge. The purpose is still there. It’s very strong. Some organisations will choose to house a wider group of people, so they’re still meeting housing need, they’ll still have their purpose, they’ll still invest everything back into the organisation.”

Given this is London, where these days even the high-earning high-flyers tend to struggle with housing costs, it makes you wonder how they can possibly make it work. “Well, we’re purchasing properties and building properties in areas that are more affordable – so they are not central London,” said Nanda. “They are on good commuting routes into town. The rents are market rents but they’re based on the ability of somebody earning 30-40K to be able to afford them. We have also developed a sharers model... so we have got people who are earning as low as £14-15K, as well as those who are earning a lot more, into this market.”

For TVHA, then, this is a long-term strategy; it pays its keep but it will only really come into its own over the long term. Meanwhile, the housing crisis continues apace. London’s influence exudes into the surrounding hinterlands. The boundaries become blurred.

As Nanda said: “People don’t think in terms of London borough boundaries, or the boundary of where London stops and the South East starts, they just think about their job, their commute, and we can see that ripple very much with people moving further out and commuting for longer in order to be able to afford a place to live. The prices in London have rocketed far greater than the South East, but we’re seeing that catch up beginning to happen now. You can say London extends a very long way outside its own boundaries.”

Enterprises such as Fizzy Living demonstrate a willingness to actively meet the crisis head on, but of course any one organisation can only do so much. A difference can only come from a sector-wide – a society wide – response, and a concerted one at that. Ultimately, that puts the ball into the politicians’ court; whether in London’s City Hall, or in Westminster’s corridors of power, or in the parochial remit of the council chamber. Here are solutions enabled, or indeed disabled, according to the calculus of politics.

Well, politics often moves in mysterious ways, but one thing the sector certainly needs is less turmoil if it is to brace itself to make a difference; a breathing space rather than yet another wave of change. As Nanda said: “We need things to take effect and to be able to achieve things. If we have another wholesale, massive reform then some of the good things that have come about won’t ever be achieved because we’ll be trying to cope with yet another change.”

It’s time, Nanda said, for politicians to open their ears, stop tinkering, and get out of the way so that the housing sector can get on with the job.

This interview first appeared in the April/May 2014 print edition of Housing magazine. It was subsequently re-published on the Housing Excellence website, 29 May 2014

Asset management in social housing

Knowing the stock is an asset in itself

These days managing assets is as much about market intelligence and financial performance as it is repairs and maintenance to the housing stock

By Mark Cantrell

From Housing magazine, April/May 2014

THERE'S a difficult balance to be had for social landlords these days, between maximising the commercial potential of assets in support of their social purpose – but not taking things so far that the bottom line becomes the purpose.

Like it or not, this tension goes to the heart of asset management processes; it’s no longer just about repair cycles and maintenance timetables, but targeted investment, knowing the value of stock and its likely returns, calculating the numbers to find ways of gaining more bang for the buck, and ensuring resources aren’t wasted.

“The role of asset management within housing associations has never been more important,” said Sara Woodall, director of corporate housing services at the Accord Group. “Across the sector, and partially as a result of the changes to benefits, there has been a renewed emphasis on asset management that delivers increasing value-for-money, whilst meeting customers’ diverse needs.

“An important way of making the most of assets is to regularly review them, their costs and their benefits, and to ensure asset management and stock disposal strategies are intrinsically tied into business objectives. We have developed a model which allows us to do this successfully, while also supporting our wider goals of creating jobs and stimulating local economies by investing in them and local businesses.”

These years of austerity have certainly taught the sector lessons in change, across a wide swath of activities, and asset management has been no different in terms of the shifting culture. As Mark Kirkham, a director with assets and facilities management software firm, Service Works Group (SWG) has observed, there has been a definitive shift from the passive to the “pro-active” in asset management.

“The fundamental principle of asset management is to intervene at strategic points in an asset’s normal life with optimised repair and maintenance activities, in order to maintain the performance of an asset and extend its life. Proactive asset management provides a holistic view of what the organisation owns (or leases), where it is, what state it is in, and when it will next be maintained or replaced,” he said.

“Social landlords are now increasingly focusing on the concept of active asset management. The previous modus operandi was largely passive and focused around a ‘rip and replace’ every five years. If something broke down in the meantime it was repaired, but there was little notion of routine inspection and pre-planned preventative maintenance.

“That is changing, with social housing landlords offering a whole package of lifestyle support to their tenants to enable them to look after the properties and associated assets. The pressure to reduce costs and waste is also forcing a change in the ‘rip and replace’ strategy to ensure assets perform to their life expectancy.

“Proactive maintenance is at the very heart of asset management. A well-thought-through maintenance plan will improve the condition of, and extend the life of the asset. Conversely, poor maintenance can reduce the useful life of an asset. Although an asset may be designed with a life of 20 years, good maintenance may mean that it could perform well beyond that period.”

Meanwhile, as the sector seeks to enhance and tighten up operations, one small group of social landlords are pushing the boundaries of this culture shift by experimenting with the Investment Property Databank (IPD). This is a commercial benchmarking database created for the commercial sector, which it is hoped can be put to work for the benefit of social housing.

“It is a crucial tool in the ever-increasing commercial and value-for-money landscape of the sector,” said Steve Coffey, chief executive of Liverpool Mutual Homes (LMH), one of the organisations leading on the pilot programme. “This will allow landlords to take a comprehensive view of their assets to optimise value and take a more strategic approach to asset management to ensure portfolios best meet the various demands placed upon landlords. It will also help position organisations to attract new investors.”

The aim is to get a better understanding of the social housing stock in terms of its financial performance: what each property is costing the organisation on its upkeep, what it is earning in terms of rent, and how its capital value is behaving in regard to the market, that kind of thing. LMH is working with fellow RSLs Genesis, Helena Partnerships, Spectrum, Gallions, Circle and Orbit, to carry out the three-year-long pilot.

As Maggi Howard, LMH’s director of assets and enterprise, said the IPD is a “can opener” to understanding the how and why of stock performance.

“We need to make sure we are managing our assets as effectively as we can and we need the tools to be able to do that,” she said. “The idea of Investment Property Databank is about measuring your total return on investment and understanding how your stock is performing.

“IPD was established for benchmarking in the commercial sector, it talks the language that investors understand. I think investors find housing associations and their way of working a little bit alien. This will help investors understand how individual housing businesses are performing, which could help us attract investment. And if we can demonstrate we manage good performing stock, we might get better rates than an outfit that doesn’t rate such a healthy return.”

The use of IPD is something of a first for the sector, and if applied beyond the initial pilot partners, Coffey said it has the potential to “go down as a key milestone in social housing’s history”. The end to these means, of course, is to lever in financial investment – to create the conditions for LMH and others to “better fulfil our social purpose”.

“Our sector talks a different language to the capital markets and this is partly due to the lack of economic understanding of our assets,” Coffey added. “The index lets us communicate in their terms; it allows them to read the sector better and understand our values more. Not only does it allow us to understand our costs and returns but it will also aid us should we want to raise funds on the market... The benefits for the sector are significant and the more landlords that take part, the greater the opportunities for all.”

Assets speak louder than words, you might say; in both the commercial and the social sense.


This article was first published in the April/May 2014 print edition of Housing magazine. It subsequently reappeared on the Housing Excellence website, 27 May 2014