Deal or no deal?

Originally posted on September 28 on Inside Edge 2, my blog for Inside Housing

As the clock ticks down to 5pm on Friday, what should really count in the momentous decision to be taken by housing associations?

My first thought was this is like the ‘offer he can’t refuse’ scene in The Godfather. Vote No to the ‘voluntary’ deal on the Right to Buy and you may not wake up in bed next to the head of your favourite horse but you will be inviting Osborne to do his worst in the spending review in November.

Then I thought of the BBC. Looked at in terms of narrow self-interest it seems a no brainer. Better, surely, to strike a deal on the most generous terms you can now than wait for the government to impose the same thing on much worse terms later. That’s exactly what the BBC did before the Budget when it ‘voluntarily’ swallowed the cost of free TV licenses for the over-75s in return for an increase in the license fee.

My next thought was more cynical. Isn’t the NHF a bit like the Premier League when it signed the deal with Sky that excluded the rest of football from its TV billions? Even Sky didn’t make the other clubs sell their best players to pay for it.

And then I came back to the comparison that defenders of housing associations in the House of Lords spent the Spring and early Summer making: the complaint that this is the biggest seizure of charitable assets since the dissolution of the monasteries. Except that as far as I know the monastic orders did not voluntarily agree to the seizure provided they received full compensation paid for by the forcible sale of convents.

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Who’s counting

Originally posted on September 24 on Inside Edge 2, my blog for Inside Housing

The disposal of public land for new homes looks destined to go down as one of the great housing fiascos of this decade.

An extraordinary report published on Thursday by the Public Accounts Committee (PAC) reveals complacency on an epic scale within the Department for Communities and Local Government (DCLG).

The report is a follow-up to an investigation by the National Audit Office into a programme announced n 2011 by a certain former housing minister (no prizes for guessing which one) to ‘release enough public land to build as many as 100,000 new, much-needed, homes and support as many as 25,000 jobs by 2015’. In March this year the DCLG proclaimed mission accomplished: land with capacity for 109,950 homes across 942 sites had been sold.

However, in a report published in June, the NAO found that ‘the target measured a notional number of expected homes, not actual homes built’. On top of that, a quarter of the 100,000 ‘homes’ were on land that had been sold before Grant Shapps set the target or on land that was categorised as ‘sold’ when its owner simply moved outside the public sector (Royal Mail was privatised and British Waterways moved to a charitable trust).

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Last laugh

Originally posted on September 17 on Inside Edge 2, my blog for Inside Housing

As official figures further undermine the government’s credibility on the right to buy there are new doubts about the feasibility of the plan to extend it.

If ministers are to meet their pledge of one for one replacement of all homes sold, starts on site should now be rising sharply as receipts from earlier sales feed through the system. Any guesses what’s happening instead?

That’s right, the latest quarterly stats from the DCLG show that just 307 replacements were started between April and June – down 17 per cent on a year ago. The significance of this is not just the year-on-year fall itself, the first since the government ‘reinvigorated’ the right to buy with increased discounts and the replacement pledge in April 2012. Nor even that starts are down 56 per cent on the previous quarter (the end of the financial year). It’s also that this quarter marks three years since the start of the new scheme: the small print of the pledge says that replacements will be built within three years for all additional homes sold on top of those already forecast.

That in turn raises severe doubts about the government’s claim that it can fund the extension of the right to buy through the forced sale of high-value council homes. It claims this will raise enough to pay for the discounts, pay off the historic debt, replace all homes sold one for one and set up a brownfield fund. The detail has not yet been published but the plan has led to alarm even among Conservatives about the impact in London.

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Back to the future

Originally posted on September 15 on Inside Edge 2, my blog for Inside Housing

The first Communities and Local Government questions with a new opposition brought some familiar faces – and issues – back into the limelight.

The Labour reshuffle following the election of Jeremy Corbyn gave the shadow DCLG team only a couple of hours to prepare so it was just as well that shadow communities secretary Jon Trickett had an experienced man beside him on the front bench.

John Healey was one of the most effective Labour housing ministers and continued to show a strong interest even after he moved on. His warning about the threat to social housing helped inspire the creation of SHOUT. He explained his continuing interest in an Inside Housing interview last year in which he supported lifting the borrowing cap on council housing.

In June he wrote to the National Audit Office to call for an investigation of the Right to Buy. It’s good news that he’s back and even better that he’s a member of the shadow cabinet.

His line of attack at Monday’s DCLG questions was declining home ownership. With George Osborne describing it as ‘a tragedy’, what did communities secretary Greg Clark have to say to millions of ‘middle England, middle-income young people and families’ with no hope of buying?

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Boom at the top

Originally posted on September 14 on Inside Edge 2, my blog for Inside Housing

On current trends the first £1m a year housing association chief executive will appear by 2025.

It could happen even sooner than that. I’ve based that on the trend in the five years since 2010, which include two years during the recession when many bosses’ pay was frozen. And who knows what will happen if (when?) the first ‘free’ housing associations are launched?

I say this not to single out the highest-paid individual or the organisation involved. Nor do I deny that housing associations are complex organisations (and becoming more complex) that require skilled leaders and need to pay well to attract the right people. Places for People is far more than a housing association and currently styles itself ‘one of the largest property and leisure management, development and regeneration companies in the UK’ (to quote its website). It says that £330,00 of the £481,000 total pay package revealed in Inside Housing’s survey was attributable to social housing and £151,000 to ‘non-social housing’ businesses.

But that £330,000, and the current average of £183,000 for chief executives of the top 100 housing associations, are still huge sums and they are escalating year by year. The latter is double what chief executives got paid in the earliest Inside Housing survey that I can find (2001/02). Median pay for full-time employees has increased by around 35% since then and has been falling for most of the period since 2008.

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Home stretch

Originally posted on September 11 on Inside Edge 2, my blog for Inside Housing

With 11 weeks to go until the spending review, final efforts are being made to convince George Osborne of the case for housing.

The trouble is he’s already made it pretty clear he’s only interested in home ownership, may cannibalise what’s left of the housing budget to pay for it and he doesn’t seem to like housing associations much.

What we know so far is that the chancellor wants to cut departmental spending by £20bn and that departments have been told to model for two different scenarios: real terms cuts of 25% and 40%. If that is not bad enough, housing is an unprotected area and so bound to suffer when Osborne announces the details in November, potentially in multiple ways.

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Between the lines

Originally posted on September 9 on Inside Edge 2, my blog for Inside Housing 

Another week, another George Osborne attack on housing associations – but this one comes at a crucial time.

The chancellor’s comments yesterday at the House of Lords economic affairs committee are not the shock they would have been three months ago. In the wake of his hostile joint article with David Cameron and the decisions taken in the Budget and a summer of hostile media coverage including THAT Channel 4 News report, they may be seen as par for the course.

But nobody will need reminding of what is at stake. Ahead of publication of the Housing Bill next month, discussions continue with the National Housing Federation over implementation of the extension of the right to buy. Ahead of the spending review in November, we already know the government will look to ‘refocus’ the housing budget on home ownership and who knows if there will even be a housing budget after 2018.

So the nuances of what he said yesterday matter. And it’s probably no coincidence that he made them where he did: the revolt in the Lords over charitable associations remains the biggest obstacle to extending the right to buy. You can watch here from just after 16:02 for the section on housing but here are some extracts that give some interesting indications of his thinking.

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