Throw the HCA up in the air again and see how it lands

In his opening article for the December issue of the Governor (full release coming soon), HQN Chief Executive Alistair McIntosh looks over the key developments in the sector over the past few months.

The way we think about housing changed for all time one bloody night in West London.

I hear that the Minister has met with just about every tenant in the country. The tenants I know are shrewd and they speak well of him. This is shaking up our top brass nicely. “What is going on?” – they ask. “Well, that all depends on what your tenants are saying to Mr Sharma doesn’t it” – is my reply.

Let’s hope the think tanks are listening. These clowns came up with the genius idea that we should pull down the estates and send the folk that live there to the far corners. What happened next? Nothing. You can find lots of nice areas with estates that need a right good fix up. But the tenants won’t sign up to plans for the New Jerusalem. In fact, they fight it tooth and nail. Why? They worry about spending the rest of their life in a post code with a huge number on a slow bus edging between their new home and their real life.

Frozen in time

In effect the think tanks have frozen lots of estates in time. We need to find a way forward that cuts the tenants in. In bygone days councillors had to stump up personally if they took a daft decision that lost money. We need to bring this back for think tanks. A levy of a few billion pounds would soon wake their ideas up a bit. They are the reason many people tonight are in cold flats.

Of course the Budget was a bit of a let-down. If tenants keep piling the pressure on Mr Sharma things could get better. But we don’t help ourselves do we? Let’s look at some of the ways we waste time.

Now what was that identity crisis all about? Are we private or public? Who cares? The OBR is having none of it. They pull no punches. In their eyes it was a box-ticking fiscal illusion. Read the report – those are the actual words used. Ouch. As they say – “It is hard to argue that the change in statistical treatment reduces the de facto exposure of the Government to these organisations, were they to fall into financial difficulty, nor does it alter their use as vehicles to deliver the Government’s social housing policies.”

And while we were being clever clogs about this what was happening on the ground? How many homes did we build? Dunno – the NHF puts out different figures every time the official data comes out. It’s a bit like Obama to Trump. Every time you go low, we go high. We’re not even getting the basic facts straight.

So what’s the answer? Slap the tunes on and start musical chairs. Throw the HCA up in the air again and see how it lands. They are doing much the same with the trains and tracks. It’s in vogue. These things never work. All you need are good people, it matters not where they sit.

D for delivery

Then there is this preposterous idea that falling from V1 to V2 is a badge of honour. Is George Orwell alive and well and working at the HCA? The scoring needs to do two things not just one. Yes, you need to stay solvent. But you also need to do what you are flipping well there for. That’s building homes. At the very least bring in a D for delivery rating to capture this. And while we are at it what about an S for service rating to reflect the concerns the Minister is hearing about? The current system is set up to be gamed. Why wouldn’t you pile up as much cash as you can get away with to pick off another association that is going under? Maybe they caught a cold on sales. You can cover your tracks by ratcheting up your stress tests. If the banks need to keep £50 billion behind the clock – why not us?

Here’s one final point from the OBR. It seems that councils are borrowing like crazy. What do they use the money for? They snap up business parks. The biggest deal so far involves renting out the space to an oil company called BP. This poor council maybe did not hear the Chancellor moving us over to driverless electric cars. Hey anyone can make a mistake!

The big message from Hammond was that UK productivity is lousy. It would come on leaps and bounds here if think tanks shut up, we didn’t get involved in silly spats and we rewarded those that built the right houses at the right rents in the right places. And if the Minister is really listening to tenants, we need to manage these houses well too.

By Alistair McIntosh, HQN Chief Executive