Will tomorrow mark the end of housing associations?

Selling off housing associations would rid George Osborne of £60bn worth of debt

 

Wednesday’s Autumn Statement could mark the beginning of the end for the country’s 1,700 housing associations. The chancellor, announcing the results of the Comprehensive Spending Review (CSR) for the next three years, may announce that housing association assets will be sold off before the General Election in 2020 to help him achieve the elimination of the structural deficit in this parliament.

This could be the largest ever sale of public assets – which housing association homes became following the Office for National Statistics reclassification of associations as public bodies – and the most radical solution the chancellor could pursue.

Otherwise, Osborne faces £60bn of housing association debt – equivalent to 3 per cent of total public debt – sitting on the national accounts, throwing his debt reduction strategy into disarray, and a blockage to his status as favourite to succeed David Cameron as prime minister in 2019.

Getting shot of this debt, possibly by reversing the ONS reclassification, will be a major CSR priority.

The backdrop to this muddle has been the decision by successive governments since 1988 to deploy the housing association sector as a means of transferring council housing and leveraging private investment into social housing without taking a hit on what used to be called the Public Sector Borrowing Requirement.

Since 2010 though, Tory-led governments have set aside this consensus, aiming to fundamentally reshape social housing into so-called ‘affordable’ housing, while targeting social tenants for welfare cuts and negative stereotyping in the media.

A year of policies aimed at housing associations and their tenants, including lowering the Benefit Cap, imposed rent reductions for the next four years, requiring better-off tenants to pay market rents or to move out, and, most controversially, the extended right to buy, have all piled pressure on social landlords and tenants alike.

In the middle of the year, attacks on the housing association sector by Channel 4 News, the Spectator and The Times, claiming house building under-performance by associations, even though such claims have largely been refuted by housing commentators, was seen by many as a ‘softening-up’ of the sector.

Hot on the heels of these attacks came the rent reduction announcements in July’s Budget followed by a housing association vote in September on whether to accept the right to buy ‘voluntarily’, which was meant to head off the ONS decision reclassification – unsuccessfully, as it turned out.

On Wednesday, more than 100 years of history could be wiped away in a stroke of the chancellor’s pen. With the exception of the endowed housing trusts, such as Peabody, Cadbury, Rowntree, Sutton and Salt, the housing association legacy stretches back to the mid-1920s as part of the ‘Homes Fit for Heroes’ campaign in the wake of the First World War. They were created to improve the slums – back-to-back housing that were homes to many working class people.

Since then, housing associations have grown to own 2.2m homes in England, with an average stock holding of about 1,800 homes. The majority are community-based, answerable to local people, tenants and councils. A few hyper-housing associations, pursuing a commercialisation agenda, have been singled out by the government for attack on the bloated salaries of some top executives.

Placeshapers is an example of a more representative group of housing associations that have focussed on physical, economic, social and environmental interventions to relieve housing stress and poverty, especially in inner city communities. The most recent audit of such housing association community investment to tackle disadvantage and boost the life chances of tenants, is calculated at more than £1.7bn annually. All of this is now at risk from the CSR.

A future without community-based housing associations such as these – successful examples of the state, the private sector and local people working together in the ‘Big Society’ – remember that? – is a real possibility after the chancellor sits down on Wednesday.

Selling-off housing association assets as part of a short-term reduction strategy, will throw away a century of association achievements in supporting the most vulnerable members of society in the name of a discredited, neo-liberal economic ideology.

Kevin Gulliver is a contributing editor to Left Foot Forward and a director of Birmingham-based research charity the Human City Institute and chair of the Centre for Community Research. He writes in a personal capacity

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