In the second in a series of blogs looking back at my time as Chief Executive, I examine how remarkably resilient and adaptable housing associations are in the face of great change.
By David Orr, Chief Executive of the National Housing Federation
25 September 2018
On the day I joined the Federation, 13 years ago, we had 1,350 members. Today, we have around 700. This is not because members have been leaving in big numbers. If it were, my 13 years on the job might have been a little shorter.
It is because there has been a dynamic process of mergers, groupings and partnerships, not imposed from outside but the result of boards believing that these new structures can best help them meet their mission and social purpose.
These changes can, understandably, cause debate and even concern about whether larger organisations can deliver the local service that housing associations do best. I’ve been asked innumerable times if larger housing associations have become too big. I was asked similar questions in the 1980s, when the biggest associations hit the 10,000 mark.
My answer has always been the same. Don’t judge on size but on what is delivered.
Our housing association movement has a huge array of expertise and an offer which grows more compelling and wider daily. It includes specialists who provide supported housing and care to help people live independent and fulfilling lives in the community. It has some who have a very clear focus on a specific place and use their considerable expertise, built up over the long-term, to help make that place great. It now also has large scale, mixed tenure developers, motivated not by profit but by social purpose, who can build more quickly than private developers and make long term, patient investment in communities.
We also do some really excellent work that happens well below the radar. Housing associations help people find jobs and training and they continue to invest in core neighbourhood services, often when others have stepped away. They provide financial, debt and welfare advice. They help people leave hospital and support them as they recover from illness. They increasingly seek partnerships with others: the health service, local councils, private developers, voluntary organisations and with each other.
In many places, they are at the heart of strategic conversations where devolution and the creation of combined authorities has created a new local dynamic. And they are key economic actors, often one of the biggest local employers with an important role on Local Economic Partnerships, Chambers of Commerce and elsewhere. I have argued before, and will continue to do so, that housing associations are by far the most effective public/private partnerships in our economy, arguably in the world.
What brought about this diversification? It happened because housing associations have proved themselves to be resilient, creative organisations that have adapted to tough operating environments and big challenges in society.
When the Government withdrew all funding support for social housing in 2010 we could have just stopped. Subsidised housing axiomatically needs subsidy and the core source of that subsidy had just been withdrawn. But we didn’t.
Instead, boards and executive teams continued to think creatively and explore alternatives. They accepted, with considerable reluctance, the then government’s alternative offer of much reduced subsidy to build new homes at higher rents. They increasingly moved into market rent and sale, partly because we needed these new homes in the economy but most importantly partly because they helped fund new homes for social rent.
Since 2010, there are probably around 20,000 new homes for social rent which associations have built using this model. In relation to the compelling need it’s a tiny number. It is also 20,000 homes which would not otherwise have been there, supporting 20,000 lower income households.
I believe this is a triumph of creative thinking and a superb contribution – which is now embedded in our sector. As the Government wakens to the reality of the housing crisis and tentatively invests again in this work, we have the collective capacity to do far more than was the case 10 years ago.
The change we’ve experienced (and shaped) has placed new demands on boards. Housing associations used to operate within defined, government-imposed parameters and with a vast array of written guidance from the regulator. Good governance was nice to have but not business critical. Instead, playing by the rules, not deviating from the norms imposed by government agencies were the major success factors.
Now, we’ve moved from a safe environment which limited our potential to one where boards are fully accountable for the decisions they make – decisions which have to reflect the mission of the organisation and put the needs of the community at the heart. The assets of housing associations belong to the community, and boards are the custodians and guarantors of those assets. The assets are considerable and must be used in the most effective way possible to deliver the very best for our communities.
This new regulatory settlement and new relationship with the state means that high quality corporate governance really is business critical. And as the job has become more demanding and rewarding, the quality of governance has significantly improved. People understand that they take on a huge responsibility when they become a board member of a housing association. There are still areas for improvement, but overall, the level and competence of governance is good and getting better all the time.
All of this means that housing associations have become organisations in control of their own destiny. They are, of course, hugely impacted by decisions taken in government and elsewhere, by the state of the economy, by the relationships they have with key partners and by myriad other factors. But their futures are affected by these things, not fundamentally determined by them.
Housing associations can survive and thrive through their own leadership, their own assets, their own decision making, their own people and by having their own vision of their future. That vision transforms lives and communities around the country. And it’s a vision that belongs to them and to no-one else.