It’s tough, so let’s get thinking

By John Coburn - on 26/02/2014

John Coburn, Networks Manager at HACT sets out the challenges facing the most disadvantaged neighbourhoods and asks the housing sector to be heard in the political battle ahead.

We are coming to the end of the 5 year term coalition government and whatever you think of Cameron, Osborne, Clegg and co they have been radical in reforming public services and challenging the assumptions of the welfare state.  The Universal Credit has been welcomed by all mainstream political parties because everyone agrees that you should be better off in work than on benefits.  However the changes have been implemented at a time when the country’s economy has been in freefall, and the medicine proposed has been significant cuts to public expenditure to bring about renewed economic growth.  Who has suffered the most in this age of austerity?  The poorest in society and consequently social housing residents.

Would a new government be in a position to reverse these benefits cuts?  Probably not as the Institute for Fiscal Studies (IFS) report even in 2018/19 the national debt is still forecast to 76% of national income.  The bedroom tax may be scrapped but the reality is that welfare for those on out of work benefits will be squeezed even further.  Associations’ business plans are threatened by these cuts as it increases the potential for more and more residents to fall into arrears. Therefore day by day we see housing providers attaching new conditions around training, employment and volunteering to tenancies; and rewarding good tenants and punishing the bad.  HACT is researching the new approaches to tenancy management with a number of housing associations, and we will see over the longer term whether these changes help with rent collection.  Without steady rental income, housing providers’ ability to build more homes will be hampered.

HACT’s work with Inclusion over the past 3 years has helped highlight the changing approaches the sector is taking to actively support and empower residents getting into work.  Unlike 2 years ago housing providers know who their workless tenants are, and are thinking strategically about the role they should play, e.g providing direct services contracting out to voluntary and community organisations.  They are looking across the business and through their supply chains to deliver ‘social value’ and more jobs.  And are developing solutions to real challenges their residents face in areas such as digital technology, community transport and childcare.  However there is a limit to what charitable housing providers can do to stimulate growth in our poorestcommunities.

Many on the Conservative side of the coalition believe that reducing the size of the state would have the positive effect of unleashing the flare, potential and crucially the resources of the private sector.  And whilst many public sector jobs have been lost; neither the government can champion the fact that a 1 million new jobs have been created.  However, a recent Centre for Cities publication revealed that 80% of these new private sector jobs are in London.  And there are constant reports that many of the new jobs created are part-time and are low wage.  It is doubtful that social housing residents living in former industrial towns from this economic growth.

If the state moves out then society should move in, so the aspiration of the ‘Big Society’ went.  Everyone acknowledges though that significant money is needed to regenerate communities and create jobs (look at High Speed 2!) but at the moment government nor the banks are going to give it. Even Big Society Capital has found it difficult through its model to lend to worthwhile projects. Therefore if transforming communities is going to be hard, another approach that can and is yielding results is the government’s Start Up Loan Fund which is supporting individual businesses with loan finance and mentoring.  HACT and the Community Development Finance Association (CDFA) are testing this model in community finance partnerships between housing associations and CDFIs (social lender) to finance and support resident-led entrepreneurs.  Exploring the wider social and economic impacts at the end of our programme will be interesting, but it isn’t on its own going to do enough.

An election in 2015 then, what is the housing association sector going to do?  Are we going to accept the status quo?  Or just moan incoherently from the sidelines?  No.  It’s time for sector or even ‘movement’ to offer solutions based on evidence and understanding.

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