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By Colin Wiles, housing consultant.

A blogpost from SHAC, the Social Housing Action Campaign, caught my eye last week. “A sector that’s lost direction” accuses housing associations of “losing their integrity as charitable organisations” and “becoming indistinguishable from private developers entirely focussed on private rents and sales”.

It called for control to be ceded to “tenants, residents, and workers who are directly impacted by leadership decisions. Ultimately, only democratic accountability can force the change in direction needed”.

The growth of housing associations over the past 60 years has been astonishing. Take L&Q and Notting Hill Genesis. Both were founded from scratch in 1963 by inner London clergy to help the poorest people living in appalling housing conditions. They started with a few local
donations and ran street stalls and charity shops to raise funds.

There was a swell of idealism and hope across the country at that time. Things could be better, they argued. Almost 60 years on and both are huge commercial operations. L&Q has over 100,000 homes.

Critics of the way housing associations are evolving are to be found within and without the sector, and the argument about them abandoning their founding principles and values is nothing new. Almost 20 years ago I wrote an article for the now defunct Housing Today Magazine called “Dawn of the Monster Age” (I can’t find it online but I have a hard copy if you’re interested).

I bemoaned the craze for mergers and the emergence of mega landlords “which have both a fuzzier geographical focus and poorer levels of governance and accountability than their local authority counterparts”.

I described how the large London-based association I had worked at had “local committees that were meant to address local democracy but, in reality, the board kept decision-making to itself”. I warned that large, monolithic council housing departments were in danger of being replaced by even larger landlords that were less democratic, less accountable, and harder to regulate.

I can see both sides of this argument but there is no doubt that we have lost a great deal in the rush for growth in recent years. Whenever I speak to residents’ groups I tell the story of Hereward Housing. They were based in Ely and took over the stock of East Cambridgeshire
Council in 1993. They had a local board, with tenant committees, and an office in a fine Georgian building, employing well over 100 staff. Then in 2007 they decided to join a much larger association.

Of course, all the usual promises were made: they would keep their identity, their local base and their board, and would be able to make local decisions. But within a few years the office had been sold to a hotel chain for £4m; most of the service had been shifted to a call centre hundreds of miles away; the local board was abolished along with tenant representation; and all that was left was a portacabin in a supermarket car park with a handful of local staff. The council was not happy about this but there was little they could do.

Faced with a landlord that had homes in hundreds of local authority areas and an uninterested regulator, they were powerless. Perhaps they now regret their decision to go for stock transfer?

The low point in the relationship between housing associations and councils came in November 2015 when the National Housing Federation made a unilateral voluntary Right to Buy deal with the government, rather than face legislation to force them to sell their homes.

The discounts would be funded by the sale of high value council homes, causing a severe schism between the housing association sector and local authorities. This was the time when associations were re-classified as public bodies by the ONS, and the government acted quickly to tweak the regulatory regime so that they could be re-classed as private outfits.

I wrote a blog about this at the time, but, thankfully, the Federation is now under new management and hopefully some of these rifts are being healed.

On the other side of this argument is the hard reality of realpolitik. The largest associations have had to merge in order to achieve economies of scale and to deliver more homes, they argue. They are merely following the money and falling in line with government policy. After
all, what would be the point of resistance?

The government would merely find others to deliver their manifesto. The SHAC piece admits this and says of the commercialisation of associations: “…government policy, institutions such as the regulatory bodies and the finance houses concerned with the sector, all support this line of travel.”

Many associations will argue that market sales are essential in order to provide genuinely affordable homes. It is true that many larger associations are now hard to distinguish from commercial outfits, with their slick marketing techniques and corporate branding. Some might
say that this is no bad thing.

Given the woeful quality of some of the homes being churned out by the volume housebuilders, is it not a good thing that social housing providers are competing with them, hopefully providing a better quality and safer product? In diversity is strength.

But there have definitely been growing pains involved in some of the mergers that have taken place in recent years. I am aware of many Facebook groups organised by disgruntled tenants of some of the largest landlords. I have been asked to join a couple.

The litany of complaints is fairly troubling and suggests that some of these landlords are struggling to deliver the basics. This is definitely an area where the regulator needs to strengthen its scrutiny of the consumer standards.

Anyway, this is a debate that will rumble on, but I think it is important that we are able to discuss the issues in a rational and objective way, without rancour. Is there an optimum size for a housing provider? Is there an optimum geographical spread? Is the level of democracy,
openness and accountability adequate? Going back to my “Dawn of the Monster Age” article in 2001, I asked, “How long before we see the first RSL with 50,000 units?” Well, we are already way past that milestone.

Perhaps if I am still writing this stuff 20 years from now, I will be asking when the first provider with 500,000 homes will be seen? I hope it never happens. Creating landlords that are too big to fail is a step too far.