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
23 Responses to “Will tomorrow mark the end of housing associations?”
Woo11
Its really great to here your fighting spirit david munnick! I agree with what you say about it all looking very bleak, and even more so for future generations. Which is your HA may I ask? I do try to hold my HA to account, but have not joined the recently set up Tenants assoc. But maybe I will give it a try. What are you banging your head against a brick wall about? Any tips about Tenants associations?
Woo11
I wonder how we might be able to set up something online so that we can share experience? I have seen from all the people being pushed out of council housing in London, that action groups attempting for instance try to stop sell off, or get the council to acknowledge responsibility to rehouse them, have been local affairs and so many have either lost their homes, or been moved far away. I feel there needs to be a coming together of HA tenants across the country to discuss points of interest. No idea how to go about this however!
Woo11
I imagine that all those extra costs is a contributing factor to so many new owners selling on. In my HA which has properties all over SW London, those that have been bought in the best areas are, we are told by the HA, now in the hands of companies renting at extortionate rents on short lets, or, have them empty!
The additional issue with that is that suddenly a settled house with HA tenants in rented flats – a stable population, becomes a place where relatively wealthy young professionals with jobs that can support such rents come and go at 6 month intervals, and have no real connection with a community, the members of whom when they were HA Tenants take much more care of the property, and often of each other.
Woo11
‘Everyone sees no chance of anything but a Tory majority in 2020’, not how I’m looking at it, please don’t talk it up like that, you are a gift to the torys if you do. I still believe in a type of democracy, and the energy it has created. So sod the polls and sod the media I am not going to be afraid for the next 5 years. Apart from that I agree with what you say!
Mark Frankel
“The Government has said that the properties sold under the voluntary
scheme will be replaced on a one-for one basis; however, this has raised
questions around how replacement will be financed; the timing of
replacement (there will always be a time-lag); and where the
replacements will be built.” This comes from a Parliamentary research briefing and gives grounds for serious concern.