By Alistair McIntosh, HQN CEO.

It’s like Déjà-Vu all over again. Liz Truss wants rent increases capped at 3%, 5% or 7%. Nicola Sturgeon upped the ante by calling for a rent freeze. Scottish Labour backs her on this but wants an even longer freeze. What line will Keir Starmer take?

To be fair, most associations north of the border were already talking about pegging rents below the rate of inflation. Way back in January, Tory and Labour councillors in Wandsworth voted to freeze rents and heating and hot water charges. It looks like some sort of cap on rents is inevitable.

We’ve been here before in England. George Osborne cut rents for four years. His aim was “…to end the ratchet of ever-higher housing benefit chasing up ever higher rents in the social housing sector”. He thought landlords wouldn’t feel a thing as they could become more efficient.

The need to save money gave impetus to the push for mergers. Before Osborne cut rents there were 332 associations listed in the RSH global accounts. Today there are around 200. That’s quite a cull. In a similar vein, many councils moved away from ALMOs and stand-alone departments.

At the time, PlaceShapers asked HQN to write a toolkit to help its members weigh up the pros and cons of mergers. Form Follows Function was the name we agreed for the project. The basic idea was to develop a guide to assist boards to pick an option that was the best fit for their values, ambitions, and finances. We looked at studies of mergers across the globe and spoke to landlords and tenants here about what they wanted to see. Of the boards that used the toolkit, some did merge but others did not. As the saying goes one size does not fit all.

Should we revisit Form Follows Function? If anything, the challenges to how we are structured are even more severe. On top of a rent ceiling, we have a cost-of-living crisis for tenants and rocketing costs for landlords. It’s pretty obvious that many tenants – and shared owners – just can’t afford a rent increase. And you’ve probably already worked out the damage a 5% rent ceiling will do to your plans for new build, net zero and repairs. A number of maintenance contractors are struggling, and this won’t improve their chances of survival.

There are no easy answers. Of course, some associations will decide to merge. But if your finances aren’t great you may struggle to find a partner these days.

Life has changed in other ways too. Consumer regulation is on its way and we could see “Ofsted-style” inspections by 2024. Already the RSH has written to landlords warning that in responding to the rent ceiling “…the safety of tenants and the delivery of essential landlord services must not be compromised”. You can expect the Ombudsman to keep up the pressure on service quality.

It certainly feels like the age of passivity is over. Tenants and shared owners are highlighting poor standards on social media. Staff are, quite understandably, calling for pay rises.

The pressure on councils and associations to deliver good services is intensifying as budgets fall. How do you square the circle?

HQN is not pretending to have the answers here by the way. But we do think it is a good idea to relaunch Form Follows Function.

What would it do? Here are a few ideas:

We could look at the lessons from mergers. What worked well? If you had your time again, what would you do differently? Did the merger save money? What were the tradeoffs? Are services now better? How do you keep a focus on local services as you grow? Is there a way for large landlords to buy services on behalf of smaller peers?

What happened next after ALMO services went back to the council? Has it gone to plan? How have council amalgamations and re-structures worked out? Did you make the improvements and savings you sought? What advice would you give to others?

Repair services are under pressure everywhere. What ideas do contractors have for getting on a stable footing? Should landlords support contractors during this crisis? Can we train our way out of the crisis?

Let’s talk frankly to tenants, shared owners, and staff. The wheels have come off the rent setting process. Would it work better if residents agreed the rent increase and business plan with landlords properly? Then we wouldn’t leave the gap that government steps into repeatedly. Is there a bigger role for mutual associations and tenant management organisations?

Is there any hope of government funding to help? OVO Energy has called for a mass insulation drive as part of a package to free the UK from relying on expensive gas imports. Will the government listen and release the cash to improve our homes?

How will we get the answers to these, and other, questions? HQN will do what we did last time on Form Follows Function. We will put surveys online to gauge the views of board members, councillors, staff, and residents. Then we will follow up by meeting with people who can shed light on the solutions. We will update our review of academic studies of mergers. Our problems are far from unique so we have much to learn from others.

But mainly we want to hear from you. Then we’ll share the findings and turn these into a practical toolkit that helps you to weigh options.

If you’d like to be involved in the new Form Follows Function project, please contact [email protected]