Our CEO, Matt Leach, is the first person to 'guest blog' on the blog page of Matthew Gardiner from Trafford Housing Trust (mirrored on our blog), talking about why the progressives within housing should be attracted to what HACT is currently doing.
When the Homes and Communities Agency last week announced the appointment Andy Rose – an infrastructure and finance specialist with little background in housing – as their new CEO, with a clear brief to imagine a world beyond grant, it represented less a major break from the past, but rather confirmation of a fundamental change in relationship between housing providers and the state that has been happening slowly and progressively since the 2010 spending review.
Whilst Inside Housing’s 2010 headline was perhaps premature, the last three years has seen a sweeping away of certainties and an explosion of both risks and possibility. After forty years in which nationally-driven investment and regulation has dominated the business plans, governance and culture of the affordable housing sector, housing associations are now entering an era in which their businesses will be defined by their own mission and values, rather than by the ticking of boxes for the state and its agencies.
This new operating territory isn’t and won’t be an easy one to navigate. The combination of a new assertive localism and constraints on the resources of the local state has not yet fully played out. The much PowerPointed “graph of doom” has multiple variants (my own favourite is on page 9 of this LGA report); what it highlights is the extent to which the local financial cliff edge will be reached in many areas over the next two to three years, with the poorest communities likely to be least able to accommodate the withdrawal of services it implies. In that context, maximising the value you can deliver for your communities from the resources at your disposal will at least as important as filling in value for money assessments for the regulator.
At the same time, welfare reform is pending conventional thinking about business models and risk. It isn’t just the specifics, whether bedroom tax or direct payment or universal credit; rather, the current round of reforms effectively rip away the consensus that underpinned 20 to 30 years of business fundamentals. For much of the housing sector, when it came to borrowing, the more welfare dependent your tenants, the more secure your cashflow against which you borrowed. So whilst tackling worklessness was always the right thing to do, it wasn’t necessarily a business fundamental.
But risk assumptions are now upended. Jobless tenants are an ever bigger risk, because who knows what will happen next in terms of government welfare policy; housing providers can no longer assume that the unthinkable will not be thought and then happen, particularly in the context of the biggest and ongoing crisis in public finances ever seen. So community investment in worklessness activity becomes not a “nice to have” or an “ethos driven activity”, it becomes a practical and pragmatic way of derisking your business. Fundamentally shifting the division between what was something the communities team did with a bit of spare surplus and the core of what housing association’s businesses will need to be about.
In the face of this level of change, new models and approaches are being explored by those at the forefront of innovation in the sector; and new tools need to be developed as housing providers increasingly focus on maximising the impact of the resources at their disposal. Importantly, new narratives need to be found to describe and explain the changing role and purpose of a rapidly transforming and diversifying sector. This isn’t just about how the sector presents itself to government, but also how it defines itself in terms of values, purpose and mission.
HACT believes that housing providers need to think radically about their purpose, how they allocate resources and generate value, how they re-engineer their businesses to most effectively deliver to the communities they work in and for. Whilst our own organisation’s history mirrors that of much of the post-war social housing movement, over the last two years, HACT has reinvented itself, with the aim of providing a new voice for progressive thinking about housing, and new ideas and innovation for the housing sector. In recent months, our cutting edge research on social value has helped stimulate debate on how the sector maximises its impact; our Community Insight mapping service has provided new tools to help housing providers better understand their communities and neighbourhoods; and our events programme has engaged housing providers, and strengthened relationships with a wider community of organisations helping to define a rapidly changing civic and social economy.
But we accept that we are still just scratching the surface. In 2013-14 we’re aiming to go that much further, providing a platform for some of the newest and most exciting thinking and innovation in a housing sector that will define itself by its response to a world that has changed. So in a world where regulation, austerity and financing costs of debt are driving associations to cut costs in a quest for ever greater economy and efficiency, will they have the courage to stay true to their mission and measure success in terms of their effectiveness?