The idea, it appears, is that the private sector is good at delivering bricks and mortar but would not want to manage stock. Therefore, a partnership whereby private builders used their economies of scale and management efficiency to build houses in partnership with housing associations – which would take on the management – would surely get the best of both worlds. Indeed, such a partnership focused on mixed communities would deliver precisely the sustainability at the heart of the Prescott plan.
Housing associations should not be surprised. The idea might have been a late addition to John Prescott's communities plan but it has a long pedigree. It saw the light of day in the mid-1990s when it was a candidate for inclusion in the last Conservative government's housing bill, before housing association opposition frightened the political horses.
Behind the current thinking is the hint that the government reckons housing associations are getting a little lazy on the fat of the land, and that competition would deliver better value-for-money. Private developers have argued that opening up access to social housing funding would help them challenge the cosy cartel between housing associations and some local authorities. The deputy prime minister needs to deliver his targets, and a desire to streamline housing production is inevitable. The Treasury, with its tendency to look towards private sector solutions, and No 10, with its emphasis on the better delivery of public services, also have good reasons to challenge the registered social landlords' monopoly access to funding.
At stake is the £1.4bn Housing Corporation budget, which funds development by about 385 RSLs, the bulk of the funds going to the top 120. The biggest single grant this year is the £54m for the Home group. I suspect that the Housing Corporation itself will be lukewarm about the proposal. It will argue that the introduction of longer-term programmes for RSLs (three or five years) will encourage innovation and efficiency, and that the bureaucracy of the system could be relieved by the approval of standard house-plan layouts to reduce the time and cost of approvals.
Behind the government’s current thinking is the hint that it reckons associations are getting lazy on the fat of the land
Many housing associations will echo these thoughts. They will insist that there is an efficient mechanism for housing delivery in existence that should not be disabled. The National Housing Federation argues that "breaking the link between the construction and management of affordable homes is likely to compromise quality and sustainability". No argument is fought these days without all sides claiming sustainability as their guardian angel.
Since housing associations were likely to manage the houses they built for 30 years or more, they had a vested interest in making sure that they were of good quality and in sustainable neighbourhoods. The NHF warns of the risk of insolvency, and the "leakage" of public money into profits or land prices, and it takes umbrage at the thought of the private sector escaping the regulatory regime applying to its members.
There is already some concern among housing associations that the regionalisation of the Housing Corporation's programme and the involvement of reinvented urban development corporations and English Partnerships in housing strategy threaten the corporation's effectiveness. The introduction of private sector competition, even if intended to be in partnership with housing associations, would create a much more challenging environment.
But not all associations will be hostile to the proposal: some RSLs want to move into market housing – becoming small developers. Most larger groups are doing some market-rented business, and the rent restructuring process has obliged associations in northern England and the Midlands to address efficiency and competition issues. The government is suggesting that private sector bidders for social housing grant could be regulated on the basis of contract rather than through existing processes, and the more ambitious associations might be tempted to seek to come under the same rules.
David Curry is MP for Skipton and Ripon and a former Conservative housing minister.