What is the role of housing associations? We all know that they are independent social businesses and 310 are "in business for neighbourhoods", but how many have narrowed this down to a business plan that secures a long-term future and direction? In retail terms, is your organisation aspiring to be an aggressive, expansive supermarket chain, or a niche boutique?

The seismic shift in the way development is being procured and funded is forcing these questions on everyone. In the next few weeks the Housing Corporation will have drawn up its list of development partners, and although there will still be a conventional bidding round, a good many of the 350 housing associations that currently run development programmes will be left out in the cold.

The knock-on effect could be quite devastating. Local partnerships could crumble, development teams may break up and high flyers might leave. It's starting to dawn on the sector that the only way to grow will be by merger or transfer. Meanwhile, development – which many see as being as much of a way of life as collecting the rent – will be no longer be an option.

There are, of course, many other aspects to this policy change that do nothing to help those soul-searching for their long-term role. For, while the government is breaking down the barriers between private and social housing developers by allowing the private sector to bid for grant, the ambitions of the entrepreneurial housing association are being frustrated by red tape.

It’s starting to dawn on the sector that the only way to grow will be by merger or transfer

Housebuilders are claiming they can shave 15% off costs, and though associations might want to follow this, regulatory constraints make it impossible (page 15). Does the government want Tescos of the housing association world, or is it ultimately (and understandably) concerned that since its own quango guarantees the sector, it has to rein back risk? And what about that other gaping hole in the development policy: the Treasury wants to see registered social landlords using their assets to borrowing more for building, but many of those with valuable stock will not necessarily be the ones with social housing grant.

There are few official clues as to what the shape and role of the sector should be. We know the government wants more new homes, it wants housing providers to be more efficient and it wants them to provide better services to tenants. But does it really know how big a role housing associations should play? And would it prefer to see more chain stores and fewer niche players?

Source

Housing Today