The grapes of wrath

If 1999 went down as the Housing Corporation's annus horribilis, 2000 has, if anything, threatened to be much much worse. Last year, of course, we had the naming and shaming saga and the much-panned Regulating Diversity proposals, as well as the demolition of corporation-approved new homes in the north east. Just a few weeks into the New Year, the criticisms have intensified. The corporation, we are told, is heavy-handed and its regulation burdensome and weak. Everyone from the Chartered Institute of Housing and the National Housing Federation to would-be London mayors is having a go.

Far from being bowed by the criticism, the corporation, and its chairman Baroness Dean, are coming out fighting. Dean is, she admits, in bullish mood.

"The Housing Corporation is here and we think we fulfills a need," she says. "We are going to be around for a long time, so it's not a case of picking up our tents and going quietly into the night."

Sitting in a tearoom in the House of Lords, Dean unveils what she describes as a radical package of changes for the corporation and the way it regulates and invests in housing associations. She is keen to stress she has been listening to the sector. But the corporation's "regulation revolution" has been prompted from within rather than coming in response to the "gripes", she insists.

One example of a gripe is the reaction to naming and shaming. "The sector told me we had to be more open," she says. "So when we publish rents, when we publish standards and indicators they don't like that - that's not the kind of openness they want."

Those who kicked up a fuss over Regulating Diversity also got the wrong end of the stick, according to Dean, by mistaking a discussion paper for concrete proposals. She's not someone, she stresses, who's unduly worried by being a target for criticism.

So does the corporation accept there's anywhere it's been going wrong? Yes, says Dean, and it's the "genuine complaints" which are being addressed.

"I do listen and sympathise with some of the views that the regulatory framework now is so caught up in bureaucracy, that isn't it time we took a step back and questioned what it's achieving? This review gives us that opportunity," she says.

What is being proposed, she explains, is a more flexible approach, which allows for different regulation for different kinds of housing associations. The burden will be eased for smaller associations, and the bigger ones will have a visit from the regulator less often as long as they are performing well.

"Those that don't meet the standards in the industry we deal with very heavily, those that do we ease off," she says. "We are moving from a bureaucracy to an organisation that's using its judgement based on its experience but also being a kind of knowledge-based organisation. We know it will make us more vulnerable in some respects - because we won't be able to say to people "it's in the rules" - but we will be working with a much more flexible framework."

The new flexibility includes a sweeping away of "petty bureaucracy" such as the Schedule 1 rules restricting possible conflicts of interest on boards. They're out of tune with today's realities, particularly for stock transfer associations, says Dean.

But flexibility doesn't seem to extend to scrapping the performance standards regime - at least not for the foreseeable future. Despite the calls for the corporation to allow associations to concentrate on the continuous improvement demanded by Best Value, Dean insists that's for the "medium to longer term".

"I think we are kind of betwixt and between. We've got performance standards established and we've got Best Value that isn't and it's not been tried and tested," she says. "What housing associations don't want is to have to operate the two in tandem. That's unacceptable."

Also in the package is a new "inspectorate" within the corporation. Tenants will be central to the inspections and mystery shoppers could make an appearance. But how exactly the inspection teams will work is not yet clear.

One thing that is certain is that more resources will be needed. But government won't be asked to foot the whole bill, Dean insists. Efficiency savings and bringing in talent on contract will also play a part. But will it be able to cope with a rapidly expanding sector? Dean says the review has given the corporation the chance to look at how it addresses potential problems in the sector and to explore rescue plans if associations get in trouble in the face of tough issues like low demand.

So will the corporation's revolution be enough to pacify its critics? Or will it be swept away as the social housing landscape changes beyond recognition?

Dean is confident that in some form or other it will survive. Other models, such as a single inspectorate, just wouldn't work, she says, because they don't take account of private sector confidence in the sector, risk assessment - or the fact that the corporation is the "meat in the sandwich" between housing associations and politicians.

"It may not be the Housing Corporation in the form it is now, but there will be a need for an independent regulator. It might be the Regeneration Corporation. But we are confident about its future," she says.

Dean will not be drawn on her own future with the corporation beyond the end of her term of office in March next year. But you can be sure while she's at the helm, the corporation will continue to take on its critics.

"There are some revolutionary ideas in this package,"she says. "We recognise what the sector's been saying but the sector's got to know a firm message. We are not out there trying to be popular."

"The Housing Corporation is not arrogant or complacent," she adds. "We do feel if you look at the past history of the corporation, it's actually been a trustworthy and delivering organisation. But it is one that recognises that we are now at a stage where incremental change is not enough - it's got to be radical."

Critics will accept that the time is ripe for radical change. The question is, will the proposals deliver?