Why Spend More?

Government cuts merely shift the burden, and associated costs, from one department budget to another. Often providing poorer value to the taxpayer as a result. If there is to be a change in policy direction highlighting the absurdities of arbitrary cost cutting in the Welfare State, and capital funding in infrastructure more generally, is needed.

Working in housing you can get caught up in a couple of broken records, repeating time and time again that social housing is needed; and that please, won’t someone think of the poor people. It can all sound a bit noblesse oblige but often you’re one a very few voices pushing those messages. Changing tack, if only for the sake of your sanity, is therefore occasionally necessary.

Show Me the Money

What is often left out in arguing the need for a more progressive approach to policy making in this country is that being a tight arse as a Government often ends up costing the taxpayer (directly and indirectly) more than is saved.  If you have time to read his works, the University of Cambridge based economist Ha-Joon Chang is worth a visit. Whilst the forever left (behind) Owen Jones interviewed him the other week, he has been vocally critical of trickle down economics and Austerity for some time. Notably because the former is bollocks as a theory and the latter more costly for economic growth than expected.

Post-Brexit is seems ‘experts’ (i.e. people who’ve spent years learning about a particular subject) are old hat, who needs them when you’ve got a former Investment Banker (but not part of the establishment) and a former journalist with a penchant for Shakespearean-esk melodrama to tell you the truth+. But it is perhaps worth listening to the various research pieces/staff notes coming out of the world-renowned hotbed of Marxist thinking, the IMF. It has released a number of critical pieces on more recent macro-economic policy approaches and how they’ve failed to solve inequality and provide sustained growth.

It should be noted that the contents of such works represent the views of the authors and not necessarily the IMF itself. Bloody economists, they’re always particularly anal about caveats and detail. Almost as bad as accountants. To ram home the point reading Naomi Klein’s The Shock Doctrine highlights how the IMF, amongst others, has been fundamental in pushing many of the policies that have actually caused greater economic damage than progression.

What Does this Mean for Housing?

Well, being selfish, it means that it is probably worth setting aside more capital funding for infrastructure projects (like building social and affordable housing). It would also be worth re-visiting plans to strip back the welfare state to the point where all that’s available is a couple of turnips* and stale corn flakes. Both of these pipe-dreams are unlikely to happen any time soon. But redirecting the narrative is desperately needed where Central Government and the Welfare State is concerned (a bit like Own Our Future, but without the OOF acronym). Thanks to excellent research from the likes of the Joseph Rowntree Foundation the negative impact of inequality on households is well-known. However, the more recent admission from the IMF that inequality negatively impacts growth should provide the ammunition to make the case for investment over cuts. Or as Olivier Blanchard put it:

what is needed in many advanced economies is a credible medium-term fiscal consolidation, not a fiscal noose today

So change-up the language and change the focus of dialogue. The old adage of needing to spend money to make money (or in this case, save money) is useful here. By highlighting that through investing in secure, good quality, affordable housing the state, and by extension the taxpayer, gets far more bang for its buck (though I would say that, wouldn’t I?). When you can show the cost effectiveness of preventing individuals and households from hitting crisis point (and therefore requiring acute, high cost interventions) you’ve won half the battle.

Not Convinced?

Just count the cost of housing those accepted as being statutory homeless, count the cost of those sleep rough on the streets. Count the cost of those relying on friends and family for a sofa to sleep on. Count the cost of the severe damage to job prospects, education and even health that is caused by insecure, poor quality housing. Add that up and investing in social housing and a Welfare Sate is frankly a snip at the price.

Because, why spend more?

You can find more of my stuff here and follow me on Twitter here.

+Is this a dagger I see before me? No Michael Gove, it’s your political ambitions going up in smoke.

*In fairness, in Worcester (my home town) this would probably make you King…

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Nunquam Securus Via (Never the Easy Way)

I’ve always joked that as a sector that if there was an easy and a hard way of doing things to get the same result, that we pick the harder option every-time. Like someone with an unhealthy set of masochistic tendencies we tend to choose self-flagellation. Though I guess sometimes it’s because we don’t know what we don’t know and find comfort in doing things the way we’ve always done them. It’s time we broke that cycle.

As you’ve probably guessed from previous posts I have no love for the vast majority of what this Government (or its immediate predecessor) has done Housing Policy, or Welfare Policy-wise. Though in the interest of balance, the Blair/Brown Governments were pretty crap as well, they tolerated social housing, but Policy was just as fragmented back then as it is now.  Of particular concern, more recent initiatives/areas of Policy that aren’t utterly counterproductive (e.g. the principle of Universal Credit), have been swamped by an utter shite-storm of ideologically driven reforms (e.g. the reality of Universal Credit). Belief has repeatedly trumped evidence and as a man of science, not faith, I can only feel concern when that occurs. But this be the land, time and space we currently occupy. Howling to the wind won’t make a damned bit of difference. Don’t get me wrong, I have howled to the moon and back, anyone who has read even a couple of my blogs will know I don’t tend to hold back on passion, or swearing. But ultimately I’m not looking to change policy (not through this blog at any rate), just highlight to people what the sector does, where it is heading and the current policy climate.

However, as a sector, we need to do more and whilst some are attempting to do just that (Homes for Britain and SHOUT come to mind) we need to be a bit smarter in how we go about things. This Government does not care about how much we invest in communities, it doesn’t care that we are acting as a welfare state within a welfare state for many of our customers. It’s not getting politically battered for that. Where it is getting hurt is in the number of homes being built and the affordability of them. It’s why they are so pissed at our surpluses not (in their opinion) getting put to good use (i.e. being used to build homes). It doesn’t help that our go-to line is “give us money and we will build homes for poor people who can’t afford it and/or aren’t economically active”. That may play well with progressives, but to the conservative with both a small and big ‘C’ it’s like mocking their favourite brand of humus. They take personal offense to the very idea. If you haven’t already I would strongly recommend reading the Policy Exchange‘s various attempts at writing about housing. Whilst a similar experience to eating quinoa (i.e. utterly unfulfilling, and slightly perplexing) it will give you an insight into how this Government is thinking. It is no good brushing up on your French when the other person speaks Russian.

Ultimately, we still haven’t mastered the art of influencing the opinion of the public, or for that of Government (at least no consistently). Unless you state your argument repeatedly, simply and in as many places as possible you are not going to get anywhere. I am as guilty as the next chap in terms of entering into overly technical arguments, it muddies the water. Whilst this may result in a moral victory, it won’t stick in the minds of the general population. What David Cameron is a master at is sound bites, take his”bunch of migrants” statement for example. Stink caused, fuss created, message received and understood. As a sector we need to have just as clear (if less repugnant) message, and stick to it. You might look a bit like Ed Miliband but the message will get through. Just got to herd the bunch of cats that this sector is and we’ll be tout sweet.

Problem solved, well probably not as shown today by Jeremy Hunt, just because you have public opinion, evidence and a professional body on your side, it doesn’t prevent the Government from just going ahead and doing what it wants regardless. Still, no harm in trying.

You can find more of my stuff here and follow me on Twitter here

First as tragedy, then as farce?

One of the greatest frustrations I have with housing is its lack of unity when seeking to influence policy. In everything we do there are a myriad set of interests that are often directly competing against each other. If there is a means by which to do the same thing over and over in a million different ways you can bet your bottom dollar housing will find a way to do it. This is one of our great strengths, but also one of our biggest weaknesses.

Hell you just need to see the number of different award ceremonies there are to see this in action. Sometimes I wonder how the fudge we can actually get any work done. Awards don’t just occur, you bid for them, the same way you do for a contract or a piece of work. The only difference is you get a fancy dinner (that you pay for) a nice evening (that you pay for) and a chance to swan around with an award (that you have paid for in work hours putting the bid together). Don’t get me wrong, as a lad born and raised in a land distinctly lacking in diversity I appreciate the need (and benefit) of/for difference. But we seriously need to stop replicating crap for the sake of it.

I was intrigued by Hannah Fearn’s piece on the sector’s reaction to right to buy. Yes, there are some elements that have been a bit hysterical. There are some that do need to be slapped with a wet plimsoll and told to pull themselves together. However, you can’t blame a sector for reacting passionately against such a poor policy that (regardless of whether it will come to pass) would devastate the sector. In his book, this blog post gets its title from; Slavoj Zizek highlights Marx’s contention that history repeats itself. First as tragedy and then as… well, you get the idea. After the last 3 decades of leeching vital social housing via Right to Buy we need to ensure that this tragedy is not repeated as a farce. Though [insert deity of choice here] the guys and gals at CCHQ are giving it their darndest.

What we must be more aware of is that screeching about how crap a policy is will do next to nothing to change it. It is the equivalent of Evangelicals turning up at your door to convert you. You are polite, you listen and (if you are like me) you then point out all the absurdities of the bible/their faith (yup, I’m that guy). In the end you despair and say, “Yes heaven and eternity with you guys sounds swell but I’m happy to be an atheist. At least if I am damned to an afterlife in hell it’s where all the cocaine, hookers and decent music will be…” They go away having achieved nothing and frankly so have you.

Realistically the best way to defeat the extension of Right to Buy will be via the complexities of its implementation. I can’t see this getting through the House of Lords intact, even if it does there is a very strong case for legal action. Though if anyone can get that damn impact assessment released (open government my arse) that would be ace. Any move against Right to Buy will need to highlight the cost of the status quo (i.e. the horrifically bad housing policy in this country) and the value for money we provide. Because at the moment people essentially just see us giving houses to Jeremy Kyle rejects (or foreigners if you are UKIP) paid for by their taxes. Lose public opinion and you’ve already lost the battle.

SHOUT, in conjunction with Capital Economics and the National Federation of ALMOs has put forward a strong argument to highlight our true value. They have also shown some grim figures around the potential cost to all concerned if we carry on our current course and the absurdity of some of Central Government’s thinking. The good ship ‘Make it up as you go along’ needs to change direction. I won’t go through the nitty gritty, Steven Hilditch has already done a cracking job of that. But if you wish to read it you can get your grubby mitts on here.

In the meantime calm down dear, it’s only a bullshit policy. One we can stop.

As always you can follow me on Twitter here or find me using the handle @ngoodrich87, you can view the rest of my blogs here.

Clowns to the left of me, jokers to the right…

The Guardian’s latest opine (though a legitimate one) on the potential further cuts said to be drafted up by Whitehall rams home the point that those receiving state assistance are fair game politically.  Regardless of the repercussions.

I am constantly amazed that those in a position of wealth, security and responsiblity continuously, and dishonestly, shun those below them.  A significant undertone to the pre-election campaigns has been the denigration of those at the margins of society.  Let me be clear these proposals (outlined below) are immoral, unworkable and will fail to deliver what is needed to help the economy recovery properly.  They also forget that we are all a couple of missed pay cheques, a stroke, an accident, a bereavement away from being in the same position of many of those we help on a day-to-day basis.

In short the proposals include:

  • Prevent the under 25s from claiming housing benefit and incapacity benefit (because of course no-one under 25 needs any state assistance)
  • Increasing the bedroom tax (because that has worked so well so far)
  • Freezing benefit payments across the board
  • Stricter fit for work tests (because the current ones run so smoothly)

Whilst a neoliberal’s wet dream these potential changes are simply horrific.  And if they are anywhere near as unsuccessful as the benefit cap, the bedroom tax v 1.0 and the already stricter fit for work tests they will cause havoc and poverty to those already struggling.  They will not re-balance the economy, they will not drive up employment, they will fuck over those who least deserve a good kicking.  They are a set of policies symptomatic of a political set that simply cannot, will not understand what it is like to be on the bread line.

I have been steadfast in my desire for our sector to be more proactive, more influential and to be more progressive in its efforts.  Whilst much more work is needed to be done the momentum gained pre-election has been welcome.  Housing is much higher up the agenda and those at both SHOUT and the Homes for Britain campaigns deserve credit for their efforts.  We must however be broader in our remit.  We must defend those who live in our homes, not just because it makes sense financially but because it is often the most vulnerable who have the least say.

David Backwith has recently written (well yesterday in-fact) that social workers must work with service users to understand and counter the detrimental impacts of austerity and poverty.  I would argue we need to go further and fight with them, not just on their behalf, but actually together (not just like resident involvement in decision-making, real collaboration).  Because otherwise these proposals will help shrink state support to some bizarre Victorian-esk level.  And frankly the 19th century was a bit shit, so let’s not go back there.

Ultimately you judge a society by how it treats those at the margins, those at the bottom.  I would rather be on the side that offered a hand up rather than a slap down.  I believe as a sector we do a great, great amount of work to help communities and individuals that otherwise would be cast aside.  It is time we did a bit more to stand up for them.

As always you can follow me on Twitter here or find me using the handle @ngoodrich87, you can view the rest of my blogs here.

New Year, Same Issues

A new year has arrived but the omens already look bleak.  It is time the housing sector made a few changes before we really are up the proverbial creek with no wooden implement.

It’s a new year but it is not a new dawn and I am definitely not feeling good. Though in fairness that might be the post Christmas come-down.  Those of you who keep an eye on such things will have noticed the pre-election bollocks is in full swing. As predicted by none other than yours truly (and pretty much every political commentator in existence) the rise of UKIP has seen Mr Cameron and co shift to the right.  Talk of a coalition with the ‘live off EU brigade’ has been left in the air, further budget cuts are looming large and there may even be a referendum on membership of the EU earlier than planned. Goodie, haven’t had a proper white elephant in politics for a while.

On the subject of white elephants, the notion of rent controls appears to have gathered momentum again.  I have blogged on this before and without wanting to sound too Milton Friedman-esk, as that guy is a monumental bell-end, this sort of state intervention is not the answer, at least not on its own.  I have sympathy with Civitas, the think tank whose report  promotes rent controls (as well as Generation Rent) and certainly there appears to be public support for such measures (see Mr Birch’s excellent article on the subject).  However as Civitas notes, ultimately it is more housing that is needed. On its own rent controls will merely act as a mild dampener on a housing market that is only working for those already in an advantageous position.

One of my new year’s resolutions was to be bit more helpful in my criticisms, so after slagging off housing policy for the umpteenth time here are a few of my suggestions for a glorious new world.  You can thank me later, or even better pay me.  Some of these are for the housing sector as a whole, others for the incumbents in power, enjoy.

  • Stop with the brooding introspective bollocks.  The social housing sector is not Ryan from the O.C #mancrush, whilst I have also been guilty of bemoaning the fact we aren’t the most popular kid in school it is time to stop looking moodily in the distance and go talk to somebody, anybody.
  • Find a friend.  Campaign under one unified banner (Homes for Britain is the closest to doing this) a splintered set of competing pressures groups is about useful as a chocolate teapot (at least I could eat the teapot…).  Though whoever thought of the Ho Ho Homes for Britain bit please don’t do that again, ever.
  • Grow a pair (of balls or boobs, I’m an equal opportunity muse so take your pick) and get over providing properties for private rent and sale.  I’ve lived in private accommodation, I’m about to go back into the sector.  The majority of the muppets currently pretending to be landlords know as much about renting as they do astrophysics.  Get into the sector, outperform the rest of the competition and reap the benefits for all your customers.
  • Scrap Right to Buy. Because this policy provides about as much value for money to the tax payer as throwing fifties off a tour bus in central London.
  • Scrap the bedroom tax and the benefit cap.  Neither would pass the so called ‘family test‘ supposedly being carried out against new Government Policy and because fundamentally they don’t do what they are meant to do.
  • Pay a living wage.  Whether you are a social landlord, investment bank, social enterprise or a high street store pay your staff a living wage.  Aside from the fact to not do so is a total d**k move.  The number of working households in receipt of housing benefit is sky-rocketing because the cost of pretty much everything is outstripping wages.  In addition cycles of low pay, no pay are key part of poverty and failure to act will mean further reliance on the state to make up the shortfall.  Make profit through good products and efficiency savings, not through underpaying your staff you cheap son of a rabid water vole.  Invest in the people who work for you and reap the benefits.
  • Scrap affordable housing (the type of rent not social housing in general!).  Or at the very least call it Intermediate Market Rent and let those properties out to people who don’t qualify for social housing.  Because it damn well isn’t affordable for the people who need it the most.  And for the love of Michael Flatley don’t complain that the housing benefit bill is going up when a policy as stupid as this is in place.
  • Invest in social housing, whether the economy is in good nick or going the way of Old Yeller there will always be a need for social housing.  Invest in it, it is a cost we can all share.

Positive rant over, I feel like a new me already…

As always if you want to follow me on Twitter, simply click here or find me using the handle @ngoodrich87, you can view the rest of my blogs here.

Your revolution is a joke (?)

As part of my current responsibilities I sit on my employer’s Equality & Diversity Forum.  It is a break from my normal duties and gets me to see sides of the organisation I don’t often encounter.  They don’t let me out much…  I do occasionally feel a bit of a fraud because you know, University educated, white middle-class men have it so bad.  But it is nice to be able to be part of something that is working towards ensuring a culture of inclusiveness thrives and that all our employees (and residents) can get the most out of the services (and employment) we provide.  So far, so wishy, washy.  Bear with me, there is a point to this.

Being on the forum I was invited along to my organisation’s annual award/celebration of the efforts that individual staff and teams have made towards meeting E&D related goals.  The things people had been nominated for ranged from helping facilitate fitness classes for the grey brigade (old people), assisting in a particularly difficult domestic violence case (if there ever are simple ones?) and raising money for a plethora of causes.  The award was a poignant reminder that we as social landlords do more than simply provide bricks and mortar, and that we should continue to do so as the impacts are often immeasurable. Though not everyone got this memo.

Relatively recently the Policy Exchange, the Conservative Party’s think tank in all but name, produced a well constructed document on a future of social housing without grant and less regulation.  FYI Jon Land does a very good job of summarising the debate on the report here.  Red Brick does nice number ripping it apart, here.  From my point of view I was pleasantly surprised by the number of concessions the paper made around the folly of the incumbent Government’s policies. The notion that Affordable Rent is bollocks was given credence, well stated that it is a ‘misnomer’, that’s enough for me.  That too many strings were attached to the last funding round.  That Welfare Reform, in particular the Benefit Cap and direct payments in conjunction with higher rents caused by ‘Affordable’ Rents would lead to higher rent arrears.  That in its current form, capital grant works for no-one.

Other observations were that:

  • £1.1bn of grant funding from Government is a lot of money – this point is stressed a lot…
  • Too many housing associations won’t build/can’t build – 5 out of 6 social landlords are not build or acquiring any new housing – naughty people!
  • We spend too much time/effort/money on our current residents and should use more of our surpluses to build new homes – ‘cos who needs happy tenants…
  • There should be less regulation, but boards should be required to show what options they have explored to build/develop – so less and more regulation?

Being a little cynical the report also neatly side steps, well more brutally, ignores one or two consequences of Conservative Government policy.  The number of people on council waiting lists is lamented long and hard.  But whilst Right to Buy is talked about in the report not a single mention of its negative impact on the overall social housing stock is noted.  Nor the neutering of the ability of Local Authorities to build new housing to replace lost stock and expand existing portfolios.  The negative impacts of the Benefit Cap are nodded to, but not the Policy Exchange’s calls to reduce the draconian cap even further.  But most of all it fails to realise we don’t just deal in bricks and mortar.

The report seemed to think that all social landlords do is build houses.  Or not build as the case may be.  I understand that looking at how we can build more properties was a fundamental of the report but you cannot, shall not, separate all the other aspects of what we do from the number of properties we build.  To do so, to assume that we are merely machines for building (and shoring up piss poor policy making in central Government) completely misunderstands our raison d’être.

I do however admire the attempt to look at a different way of operating, even if it is largely based on a bastardisation of the model operating in Holland.  This is because we do need to look at alternative ways of financing future builds.  We also need to be mindful of how much debt we load onto our assets.  I can’t argue against the statement that there are too many Landlords doing too little to build, because for the most part it is true.  There are also a number of large landlords playing chicken with the financial markets.  To both these groups I would ask if, in the long run, either model is sustainable.  You can only sweat what currently exists for so long, you can only gamble so long before striking out.

Whilst a number have come out vehemently opposed to the report, I must confess I sit on the fence.  In terms of going it alone I think some in the sector a capable, frankly for a number of others I don’t think they would survive.  We do operate in a cosy environment and this has bred a certain level of complacency.  Will having more freedom mean we turn into ‘proper’ private sector organisations?  I don’t know.  What is the culture like in a LSVT organisation?  Still a whiff of the former Local Authority way of doing things there?  The culture of an organisation doesn’t change overnight.  And it doesn’t just change because the operating remit has altered. As Jon Land notes, there may well be a parting of the ways on with those seeking ‘independence’ keen to take on a role many others will feel uncomfortable doing.

I do agree we should build more private sector rent and market sale properties.  But I don’t believe that this should ever be our primary focus.  It is a means to an end, not an end in itself.  As with everything there is a balance to things.  I for one will be intrigued to see if an equilibrium between a drive for the production of more housing and providing for the social good can be maintained.  But I would say this, social housing is fundamentally about people, about place and then about buildings.  To state otherwise is to deny what makes us, us.

As always if you want to follow me on Twitter simply click here or find me using the handle @ngoodrich87, you can view the rest of my blogs here.

The Goldilocks Conundrum

If you ask any Chief Executive what they would like their organisation to be in the next few years the chances are they will answer with one of the following.  1) To be bigger 2) To be more efficient 3) to have a more diverse portfolio in order to spread risk and maximise income.  The last week or so has shown that such ambitions are not easy to fulfil in the current operating climate.

Our first example is a small organisation (if you have under 5,000 properties you are small) in the North West, Venture Housing, an organisation now with the dubious honour of joining Cosmopolitan by getting both a G4 and V4 from the HCA.  It also appears that both the board and executive have failed in their responsibilities to control the finances of the social landlord despite warnings from the regulator.  Having worked for an organisation twice the size, but still small in general terms, I can appreciate budgets are relatively tight.  However, just as we advise customers when things get tough for them, spend within your means, if you can’t afford to borrow it, don’t.  And whilst welfare reforms, budget cuts and the continued economic squeeze have made things tricky, as a sector we still get 50% + of our income direct to us.  So to mess up this badly means something has seriously gone wrong.  For the sake of the customers, staff and the sector in general I hope the issues involving Venture can be resolved soon.

At the other end of the spectrum some interesting news has come out of one of the big hitters in social housing.  Sanctuary, the 95,000 property behemoth has published its financial statement for 2013/14.  Apart from the usual utterly tedious and dry figures is the admission that the housing association’s debt to asset ratio, I believe the technical term is ‘gearing’, stands at 95%*.  To someone who has very little knowledge around all things finance that is sodding huge.  Though I do concede that it is ability to service debt that is the key issue here, something that does not seem to be in any doubt.  Of greater interest to me is the reason for the increase.  Inside Housing have cited the landlord going to the private sector to fund its development programme as the prime cause for the high gearing.  This is unsurprising due to the massive drop off in capital grant available for building new homes.  If central government ain’t good for it, and you want to build it, you gotta go private.  That means borrowing against what you own.  In the future it is plausible that a number of the bigger organisations follow suit.  Particularly as they largely shunned the last round of funding, much to Brandon Lewis’s delight.

It will be interesting to see how the sector will realign its financing.  For me mortgaging yourself up to the hilt is only manageable for the short term  You may manage to create some self-fulfilling growth but it is a potentially risky, almost reckless approach.  Fundamentally you can be creative as you like but to have truly affordable (i.e. social) housing you need central government grant or at least access to cheap credit somewhere in the mix.  You can make grant funding go further with additional private finance, something we have done as a sector since the 1980s.  You can be more efficient at what you do and the way in which you provide your services, something we don’t always manage.  But you need some of that good old home brewed capital grant to make the figures stack in the long run.

Ultimately one must find that Goldilocks moment (don’t worry I was always going to fit it in), where the risks are not too great/hot, or the rewards too cold (sorry), and the means to achieve your ambitions all fit (just right).  Yes we should never accept the mediocre, and certainly mustn’t throw the towel in over fighting against the reduce level of funding.  But we also need to balance what we can achieve with the means at our disposal.  Otherwise you might just find the HCA knocking on your door.

As always if you want to follow me on Twitter simply click here or find me using the handle @ngoodrich87, you can view the rest of my blogs here.

*Correction 15/10/14 Reliable sources have stated this figure could be nearer 85%.