HQN Cymru blog: End of the affair?

Lynn Pamment’s review of Affordable Housing marks a new phase in the relationship between government and the sector, says Keith Edwards, HQN Cymru Lead Associate.

Wednesday 1 May 2019 will see the publication of the Welsh Government’s affordable housing review. From the outset it was a hugely ambitious undertaking.

Six meaty objectives cross-cut by ten workstreams that covered (deep breath): housing need, grant rates and allocations, rents, build standards, innovative construction, supply chains, land, sector capacity and leveraging potential. No pressure, then.

Ten years earlier, the Essex Review had been equally ambitious – and complex. Hailed as seminal, with hindsight it was probably under-ambitious in its new homes targets and certainly over promised what it actually delivered on co-regulation.

Its great – and indisputable – success, however, was in a sense more important than any of this. It set the tone for a government/housing association partnership that has lasted for a decade.

Essex established the principles and practice of a joint endeavour that has endured. If at times this has seemed like a government/sector love-in, you can’t dispute that the outcomes have been starkly different to England.

In Wales, we have kept our faith in social housing, consistently engaged the housing sector at the top of government and delivered significantly higher levels of community investment.

Recently, though, strains have started to emerge in the relationship. The first sign of a ‘ten-year itch’ came half way through the current review. A sector used to having pretty much what it asked for in terms of rents was shocked to wake up not just to a lower increase than expected, but to no real clue about what the longer term offer would be.

So, it has been obvious for some time that something significant was changing. The fudge around competing policy objectives was coming to an end. As Inside Housing sees things ‘"t will be intriguing to see exactly how the review approaches the juggling act ordered by ministers – boosting supply while keeping levels of funding under control without making rents unaffordable."

I would add a fourth ball that we need to keep in the air: how does the sector continue to contribute to the wider social, environmental and economic objectives of government (all very much part of the joint endeavour with housing in Wales)? More starkly, what will the impact of any changes on health and wellbeing partnerships working together on carbon reduction and – in my view most importantly – be on delivering a sustainable economy?

I remain an optimist on this front. It’s worth pointing out that the relationship between the sector and the economic arm of government has never been more valued and embedded. Indeed, the cornerstone of the government’s new economic strategy – the Foundational Economy – places a much greater emphasis on the role of anchor organisations like housing associations in delivering future prosperity.

Both CHC and CIH Cymru have warned of unintended consequence arising from the review, and we know we can expect a set of challenging recommendations on grant levels, regional development, expectations of LSVTs and affordable rents. And the dynamic between local authorities and associations seems set to significantly change – greater roles for council in both allocating funding and directly building new homes are inevitable.

So, is this the end of a decade-long affair between government and housing associations? Despite the inevitable stresses, I don’t think so. This feels much more like the start of a new, adult phase in the relationship. It will mean facing up to some difficult challenges, and inevitably there will have to be compromises. And associations will need to get used to councils as more important players in strategy and delivery.

But the common ground between parties will endure because ultimately, we still all want the same things. More homes, affordable rents and value for the public purse as part of a joint mission to improve lives and communities across Wales.

HQN Cymru will be publishing a briefing on the Affordable Housing Review.

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